Organic-rich shale deposits of the Paleocene-Eocene Palana Formation in western Rajasthan, India were systematically analyzed based on the elemental composition and organic geochemistry combined with microscopic examinations to evaluate the sedimentary paleoenvironmental conations and volcanic activity and their impact on the high organic carbon accumulation. The Palana shales are categorized by high OM and sulfur contents with total values up to 36.23 wt. % and 2.24 wt. %, respectively, suggesting marine setting and anoxic environmental conditions during the Paleocene-Eocene period. The richness of phytoplankton algae (i.e., telalginite and lamalginite) together with redox-sensitive trace elements further suggests anoxic environmental conditions. The significant low oxygen conditions may contributes to enhance preservation of organic matter during deposition. The mineralogical and inorganic geochemical indicators demonstrate that the Palana organic-rich shale facies was accumulated in warm and humid climate and low salinity stratification conditions of the water columns, thereby contributing to high bioproductivity of the phytoplankton algae blooms within the photic zone. The presence of the high concentrations of Fe-rich silica minerals such as olivine in most of the Palana organic-rich shales facility volcanic origin and supports hydrothermal activities during the Paleocene-Eocene period. These volcanic activities in this case are considered influx of large masses of nutrients into the photic zone due to the ash accumulation. Therefore, high bio-productivity associated with effective OM preservation contributed to the organic carbon accumulation in the Palana Formation during the Paleocene-Eocene.