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The Paleocene‐Eocene Thermal Maximum (PETM) was an interval of extreme warmth that caused disruption of marine and terrestrial ecosystems on a global scale. Here we examine the sediments, flora, and fauna from an expanded section at Mattawoman Creek‐Billingsley Road (MCBR) in Maryland and explore the impact of warming at a nearshore shallow marine (30–100 m water depth) site in the Salisbury Embayment. Observations indicate that at the onset of the PETM, the site abruptly shifted from an open marine to prodelta setting with increased terrestrial and fresh water input. Changes in microfossil biota suggest stratification of the water column and low‐oxygen bottom water conditions in the earliest Eocene. Formation of authigenic carbonate through microbial diagenesis produced an unusually large bulk carbon isotope shift, while the magnitude of the corresponding signal from benthic foraminifera is …