This study addresses the stratigraphic and sedimentological characteristics of the Late Eocene carbonaceous shale-bearing Qasr El Sagha Formation in the Fayoum Basin, Egypt. The Qasr El Sagha succession is comprised of four facies types: coastal mudflat, tidal flat, swamp, and storm-affected tidal channels. The swamp facies contain the Fayoum carbonaceous shale facies, which have not been studied in the past. The present study reports the first publicly available sedimentological, palynological, and geochemical results for the Fayoum facies. Eight samples of the sequence were taken from a freshly exposed road cut and analyzed petrographically, geochemically, and palynologically in order to determine the paleoenvironment of deposition and prevailing conditions. The palynomorph assemblages show that the lower part of the sequence was deposited in a lowland-riparian environment with continued freshwater influx. The depositional regime in the upper part of the sequence was swampy and dominated by fresh water. Mixed angiosperms and pteridophytes dominated the woody forest vegetation and were the source for the formation of the Fayoum carbonaceous shale facies. The recovered palynomorph assemblage points to the prevalence of a tropical to a sub-tropical, warm, humid climate with heavy precipitation in the lowland, swampy areas that were in close proximity to the freshwater influx. The water table was above the fen surface, preventing oxidation of the vegetation. Intermittent flooding or fluctuation in paleo-water levels likely occurred in the peat paleo-mire. The Fayoum samples have Ro,ran values of ~0.40–0.50%, which is in very good agreement with the Tmax from Rock-Eval pyrolysis. Although a few of the samples have elevated S2 (15–24 mg HC/g rock) and HI values (125–140 mg HC/g TOC), they do not have any hydrocarbon generating potential in the sampled location as a result of their immaturity. Petrographically, the analyzed samples are dominated by huminite group macerals (up to 77%), with telohuminite (eu-eulminite B) being dominant. Liptinite content is up to 3.5%, whereas inertinite content is up to 6%, dominated by fungal sclerotia (funginite). The TOC of the facies samples does not exceed 40 wt%.