By performing scanning electron microscopy, microscopic observations, whole-rock X-ray diffraction analysis, organic geochemistry analysis, and elemental analysis on drill core specimens and thin sections, in this study, we classified the shale types of the Wufeng Formation-Member 1 of the Longmaxi Formation in western Hubei, southern China, and explored the development characteristics and formation environments of the different shale types. The results show that (1) the shales of the Wufeng Formation-Member 1 of the Longmaxi Formation are composed of three types of shale: siliceous shale, mixed clay-siliceous shale, and clay shale. The siliceous shale is a type of shale unique to deep-water environments; clay shale is the main type of shale formed in shallow-water environments; and mixed clay-siliceous shale falls between the two. (2) The changes in shale type are characterized by multiple depositional cycles in the vertical direction with strong heterogeneity and an obvious tripartite character, and the siliceous shales gradually thicken as they laterally extend northwestward, with their last depositional cycle gradually ending at a later time. (3) The Late Ordovician-Early Silurian paleoenvironment can be divided into six evolutionary stages (A, B, C, D, E, and F) from early to late. In particular, the sea level was relatively lower in stages A and F when the bottom water was mainly oxygen rich with higher terrigenous inputs and a lower paleoproductivity, which led to the formation of clay shales poor in organic matter but rich in terrigenous quartz clasts. The sea level was higher in stages B, C, and D when the bottom water was anoxic with lower terrigenous inputs and a higher paleoproductivity, which led to the formation of siliceous shales rich in organic matter and biogenic silica. The total organic carbon (TOC) contents of siliceous shales decrease in the order of stage C > stage D > stage B, which is mainly attributed to the different degrees of water restriction in the three stages and the consequently different paleoproductivities. Stage E corresponds to the mixed clay-siliceous shales, the depositional environment of which is between those of the siliceous shales and the clay shales, thereby resulting in the mineral composition and TOC content of the mixed clay-siliceous shales being between those of the other two shale types.