The Triassic Cow Branch Formation of the Dan River Basin is host to a world-class lagerstätte deposit of exceptionally preserved insects, among other organisms. The lagerstätte occurs within a cyclic, lacustrine sedimentary succession, hypothesized to have been driven by Milankovitch climate forcing. Through an integrated sedimentological and geochemical investigation, I present evidence that the lagerstätte was deposited during a lake transgression, under intermittently anoxic and ferruginous conditions. Sedimentological evidence shows a deepening followed by shoaling through a broad fining and subsequent coarsening of the sedimentary units of the sequence. This transition in grain size occurs at the lagerstätte. Despite relatively quartz-rich sediments sourced to the basin, silica-content in the studied cycle is exceptionally low. The replacement of silica by the zeolite mineral analcime, coupled with primary dolomite precipitation suggests alkaline lake water. Geochemical evidence, including total organic carbon (TOC), pyrite sulfur and iron speciation data suggest anoxic, ferruginous waters. At the lagerstätte interval, TOC content increases significantly, coinciding with the presence of darker, more laminated sedimentary lithofacies. At the interval of the highest TOC content, a spike in pyrite sulfur content occurs; likely the result of slowed sedimentation. Organic carbon-to-pyrite sulfur ratios suggest however, that the lake water was sulfate-poor and the deep waters never became euxinic (anoxic, H2S-containing). Iron proxy data show that the studied portion of the Cow Branch Formation deposited under intermittent to persistent anoxic conditions. These data suggest a confluence of factors — lake transgression, combined with alkaline and anoxic, ferruginous water chemistry — created an ideal scenario that led to lagerstätte formation.