The Permian-Triassic mass extinction included a potentially catastrophic decline of biodiversity, but ecosystem change across this event remains poorly characterized. Here we reconstruct sedimentary factories and ecosystem change across the Permian-Triassic Critical Interval (P-TrCI) in the Xiakou area (South China). Six microfacies (MF) were classified. The succession begins with a eukaryote-controlled carbonate factory (MF-1) that passes upward into an organomineralization-dominated carbonate factory (MF-2–3). Organic-rich marls atop these units reflect carbonate factory collapse (MF-4). Organomineralization-driven carbonate formation restarts prior to the Permian-Triassic boundary (MF-5) and subsequently develops into a mixed carbonate factory where organomineralization and biomineralization are almost equally important (MF-6). MF-1 reflects oxygenated shallow water environments. In contrast, MF-2–6 were all deposited in somewhat deeper environments, some of which episodically exhibited elevated salinities, oxygen depletion, and, possibly, euxinic conditions. Our results demonstrate that distinct changes in carbonate production styles, biodiversity, and environmental conditions are not synchronous at Xiakou. Furthermore, the Xiakou record is strikingly different to that of other localities, even from the same area (e.g., the Global Stratotype Section and Point section at Meishan). Together, these findings highlight the enormous complexity of the P-TrCI and calls simplified views of the Permian-Triassic mass extinction into question.