This paper deals with the formation conditions of black shales based on such analytical techniques as ICP_MS, GC_MS, isotope, organic carbon, element facies and micropetrology. Studies show that the Upper Sinian_Lower Cambrian black shales were formed in an anoxic environment, and the organic sources were algae and fungi (Thallophyta). The paper points out five geochemical indicators of anoxic environment. The organic matter, especially lipids, can be well preserved in an anoxic environment. Black shale is also an indicator of the oceanic anoxic event. During the slow degradation of organism, the organic matter absorbed and combined many elements. At the early diagenetic stage, the organic matter was decomposed, and some elements were remobilized. Hence the elements exhibit multi_stage enrichment and varied forms. The key factor is the adsorption of organism and the combination with the organic matter. The strata of Ni_Mo, coal stone, barite and phosphorite deposits are controlled by the change of sea level, and the ore_bearing sets are developed in the transgressive series and condensed sections. The black shales are characterized by high content of Ni, Mo and Mn, lower total REE, comparative enrichment of HREE, and negative Ce anomaly. Geochemical and REE features indicate that black shales were deposited in an epeiric sea environment.