Thick (2–10's m) and laterally extensive shell beds are common in the stratigraphic record, however, relatively little is known about their genesis since no single cause can explain the formation of these shell deposits. The goal of this study is to use lithologic, faunal, and taphonomic analyses to elucidate how the thick and laterally extensive shell beds of the middle Miocene Chipola Formation of Florida formed and became one of the most species-rich Cenozoic faunas in the western Atlantic Province. This study examined Chipola Formation outcrops at Alum Bluff, Cooter Bluff, and Farley Creek. Lithologic and trace fossil analyses indicate that the Alum Bluff shell bed represents an upper to middle shoreface setting, whereas the Farley Creek and Cooter Bluff shell beds represent lower shoreface and/or proximal offshore-transitional environments. Faunal data further support that Farley Creek and Cooter Bluff were deeper environments relative to Alum Bluff. Environmental preferences of most of the fauna indicate that all localities had normal, open-marine salinities with seagrass and unvegetated substrates. Samples are classified as within-habitat time-averaged assemblages, which were spatially averaged by various physical and ecological factors. Spatial averaging mixed the mosaic of communities that are represented by different types of substrate-controlled habitats within, but not across, significant variation in water depth. Finally, shell beds were accumulated by winnowing and/or high-energy events, such as storms, which produced the relatively thick, laterally extensive shell beds at each locality. Understanding the high diversity of the Chipola Formation is complicated and is likely best explained by multiple controls. Variation in alpha diversity among the localities is linked with differences in water depth as well as time and/or spatial averaging. The elevated diversity at each site was likely influenced by spatial averaging of habitats within a single depth zone, within-habitat time averaging, and poleward expansion of tropical taxa into the northern Gulf of Mexico due to environmental conditions associated with the middle Miocene Climatic Optimum. Similar poleward shifts of tropical taxa as those recorded in the Chipola Formation could hypothetically occur in the future as global temperatures and sea level rise. Future studies need to examine the biological changes associated with the middle Miocene Climatic Optimum to better understand the future impacts of ocean-climate change on marine communities.