The Neoproterozoic Doushantuo Formation, South China, preserves a unique assemblage of what are probably the earliest metazoan fossils (sponges, cnidarians, and bilaterians) in the world that could contribute to a better understanding of early faunal evolution on Earth. The formation spans an interval of dramatic biological, chemical, and climatic change. In Weng'an mine in southwest China, extensive paleontological investigations show embryonic, larval, and adult animal fossils occur in the upper ore bed of the Doushantuo phosphorite, but no animal forms have been found in the lower ore bed. Taphonomy and experiments on fossilization suggest that no fauna lived on or in the lower ore bed as it was deposited. Rare-earth element (REE) data for the Doushantuo phosphorites in Weng'an document the paleoenvironmental condition under which the phosphorites were deposited. The shale-normalized REE patterns of the upper phosphorite bed (UPB) are characterized by “old” (Vendian–Early Cambrian) phosphorite patterns. The REE patterns of the lower phosphorite bed (LPB) are significantly different with less negative Ce anomalies and less LREE and HREE depletion. The REE characteristics suggest that the Doushantuo phosphorites record seawater condition at the time of sediment deposition and are not affected by subsequent diagenesis. The REE compositions of the Doushantuo phosphorites show that the marine depositional environment changed from anoxic in the lower ore bed to oxic in the upper ore bed. The uniquely diverse and abundant Doushantuo eukaryote fossil accumulations at Weng'an thus may be related to a change from anoxic to oxic bottom-water conditions.