The world-renowned Shanwang Miocene lacustrine konservat-lagerst?tte, occurred in the Shanwang Formation of Linqu County in Shandong Province, represents an extraordinarily well-preserved and taxonomically highly diverse fossil biota. Over the past 50 years, more than 700 fossil species belonging to more than 400 genera have been reported from the 30 m diatom shale deposit, including fungi, diatoms, higher plants, ostracodes, insects, fish, amphibians, reptiles, birds, mammals, and trace fossils. This paper focuses on the relationship between the fossil biota and its physical environment with special emphasis on fossil taphonomy and paleoecological factors, such as paleoclimate, paleotemperature, paleolititude, paleogeography, and paleolimnology. Paleohydrology of the Miocene Shanwang lake, such as seasonal changes, limination, food web, and depositional history are also discussed.