The research of controlling factors on organic-rich shale of Lower Cambrian in Upper Yangtze region is one of the basic questions for forecasting favorable shale gas exploration area. Through analyzing samples of typical organic-rich black shale outcrop profile in Upper Yangtze region, the Early Cambrian paleo-environment of marine organic-rich in Upper Yangtze region is restored and the depositional environment comprehensive distinguished table is established using information from rocks, minerals, organic matter characteristics, feature elements. In Early Cambrian, the black shale is formed in a typical hypoxia. The Lower Cambrian black shale of Upper Yangtze region is a combined result of paleostructure, paleoclimate, sea level changes, paleoocean currents and hydrothermal activity, and so on. The shale development model of sea level-ascending current-hydrothermal activity-stratified water bodies-hypoxia is built. Hydrothermal activity and ascending current promote the organisms to thrive and provide the material basis for the formation of organic-rich shale. Rising sea level and ascending current not only lead to stratified water bodies, but also affect the distribution range of organic-rich shale.