Studies examining bioevents (e.g., mass extinctions, faunal turnovers, diversification events) usually only scrutinize a short interval prior to such events, however, understanding their actual paleobiological implications requires a thorough understanding of the background conditions. The objective of this study is to document the background biodiversity dynamics in a single lithofacies of the Upper Cretaceous Pierre Shale that was deposited in an offshore setting of the Western Interior Seaway (WIS) and to place these changes into an environmental context. To assess the background biodiversity dynamics, the concretionary faunas of the Baculites eliasi through B. clinolobatus biozones of the Pierre Shale in eastern Wyoming were examined to understand the structure of marine habitats in the WIS through an interval of ~2.5 Ma. Both changes in the taxonomic composition of assemblages and the relative abundance of the various species are interpreted to reflect ecological and environmental change through the study interval. The concretionary faunas are thought to represent relatively short-term, time-averaged accumulations of dead and living animals on the muddy sea floor of the WIS that were concentrated by storm or current activity. They are likely accurate representations of the original skeletonized fauna of the WIS. The samples with lower diversity and abundances show a relationship with intervals when water conditions were deepest and the paleoshoreline was furthest to the west, while higher diversity and abundances match periods when the paleoshoreline was the closest and shallow-water conditions prevailed in that part of the WIS. The decrease in diversity with depth can best be explained by the long-term presence of dysoxic/anoxic conditions that would have precluded benthic faunas. The distribution of taxa and diversity of the assemblages seen in the study interval most likely reflect migrating oxygen-controlled biofacies in the WIS that were responding to changes in depth and the proximity to the western shoreline that was in turn controlled by relative sea-level fluctuations. This analysis shows that significant changes in richness, abundance, and guild structure can arise in response to variations in sea level with no apparent changes in lithology. It is also shown that a lack of environmental context can significantly influence interpretations of paleobiological and paleoecological data and it is recommended that future lines of research should examine faunal, morphological, and ecological change in a time/environmental context.