The latest Proterozoic to early Cambrian is characterized by major global phosphogenic events and the diversification of complex multicellular life. However, the feedback mechanism of atmospheric oxidation and upwelling processes to form voluminous phosphorite deposits is unclear. South China is a key example of the sedimentary spectrum related to the Neoproterozoic to Early Cambrian bloom of oxygenic photosynthesis, with alginite deposits (sapropelite; “stone coal”), barite, polymetallic black shales and phosphorites along the passive continental paleo-margin of the Yangtze craton. Here, we present a comprehensive geochemical analysis of drill core samples from the Zhijin phosphorite deposit, including Cr isotope, Fe speciation, and bulk elemental composition of dolostone, phosphorite and black shale from the Ediacaran to Early Cambrian sequence. The positively fractionated δ53Cr values of 0.11 to 1.81 ‰ of leachates from Ediacaran dolostone and Terreneuvian phosphorite indicate intensive oxidative terrestrial weathering. The phosphorite samples exhibit REE distribution patterns similar to modern seawater and strongly negative Ce anomalies (0.47–0.61), suggesting an oxic, open ocean environment. In contrast, the absence of Ce anomaly, high FeHR/FeT, and Fepy/FeHR ratios, enhanced redox-sensitive element concentrations, high Mo/TOC and TS/TOC, and high molar Corg:P ratios suggest euxinic to anoxic conditions for the overlying black shale sedimentation in a restricted sedimentary marine environment. Bulk-rock shale samples retain the positively fractionated Cr isotope pattern. The dramatic change from oxic to anoxic conditions aligns with the fossil record, which shows a proliferation of small shelly fossils in the phosphorite and their extinction in the overlying black shales, likely by hydrogen sulfide poisoning. We infer that nutrient-rich, oxidized upwelling seawater transported phosphorus and other nutrients to the photic zone, from where organic matter settled down to the seafloor and formed thick phosphorite beds at the oxic-anoxic boundary at and below the seafloor. Our study highlights that atmospheric and seawater oxygenation accelerated the Early Cambrian bio-diversification, and the subsequent restricted basin situation is responsible for the extinction at the Neoproterozoic-Cambrian boundary.