Ostracod faunas from ODP Site 1148 in the South China Sea have been analyzed quantitatively in order to understand paleoenvironmental changes in the late Cainozoic deep water. More than 2000 core samples were taken from the Oligocene to Quaternary section, of which 725 contained ostracods and yielded at least 100 species. Krithe dominates the faunas throughout the Oligocene–Quaternary sequences, indicating that deep-sea conditions had existed since the earliest Oligocene (ca. 34.5 Ma). This suggests that the spreading of the South China Sea Basin predates the Oligocene. Three distinct ostracod assemblages have been recognized and their respective faunal turnover reflects a change in paleodepth from the upper bathyal (<1500 m) in the early Oligocene (ca. 34.5–27 Ma) and lower bathyal (1500–2500 m) in the late Oligocene to early middle Miocene (26–14 Ma) to a depth similar to the present (>2500 m) since the late middle Miocene (14 Ma to the present). Intervals when ostracods become very rare are at 28.5–27, 20–18.2 and 13–2.8 Ma. The earliest of these intervals was probably related to the high surface productivity and the depletion of oxygen content in bottom water, while intervals were the product of enhanced carbonate dissolution. Measures of evolutionary activity (origination, extinction and diversity) have been applied to detecting the environmental change and their relationship to global events. Five peaks of evolutionary activity occurred in the Oligocene (P18, P21a and P22) and in the earlier mid-Miocene N8 and late Pliocene–Quaternary N21–N22, respectively. The peaks in P18 and P21a are the possible response respectively to the global cooling events Oi-1 and Oi-2, which occurred in the early Oligocene. The marked increase in extinction, origination and diversity was synchronous with the major enrichment in benthic δ 18O in the late Pliocene N21, suggesting a reaction of the ostracod faunas to the rapid cooling of the bottom water and the initiation of the North Hemispheric Glaciation during the period of 3–2.5 Ma.