A major extinction of intermediate-water (500–1000 m) benthic foraminiferal species coincided with a major decrease in δ13C (2.8‰) of terrestrial organic matter (n-C29 alkane) and δ34S (20‰) of whole rock sulfide in a continuous siltstone sequence in the Tawanui Section (46°S paleolatitude) along the Akitio River, southeastern North Island, New Zealand, in the middle part of the uppermost Paleocene nannofossil zone (CP8). The benthic extinction (25% of species) occurred over ∼3 kyr at ∼55.5 Ma. Increases in kaolinite/illite and kaolinite/smectite ratios and in terrestrial organic carbon percentages started ∼3 kyr before the major benthic extinctions, lasted over ∼40 kyr, and probably reflect warmer climate and increased rainfall. The productivity of planktonic foraminifera and calcareous nannoplankton decreased ∼3 kyr prior to the major extinctions and recovered at the time of benthic extinctions. These events that started ∼3 kyr before the extinction can be best explained by warming, increased rainfall, reduced salinity of surface waters, and increased influence of warm saline deep water (WSDW). Benthic foraminiferal oxygen indices indicate a strong decrease in dissolved oxygen levels within the intermediate water from low oxic (1.5–3.0 mL/L O2) to suboxic (0.3–1.5 mL/L O2) conditions coinciding with the benthic extinctions. Increases in total organic carbon (TOC) and in the hydrocarbon-generating potential of kerogen (measured as the hydrogen index (HI)) agree with the interpretation of decreased dissolved oxygen levels of the intermediate water. The lowest oxygen conditions lasted ∼40 kyr and coincided with a decrease in calcareous benthic foraminiferal productivity, highest TOC levels, and lowest δ13C of terrestrial organic carbon. Dominant formation of WSDW or sluggish intermediate-water circulation caused by warming and high rainfall in high-latitude areas most likely led to the ∼3-kyr time lag between events on land and in surface waters preceeding the extinction and the development of dysaerobia in the sea, coinciding with the major benthic extinction and decrease in δ13C and δ34S in New Zealand. Global warming of deep and intermediate waters may have caused decomposition of methane hydrate in sediments, resulting in a strongly decreased δ13C of marine carbonates, promoting dysaerobia in the ocean, and warming global climate by increased methane concentrations in the atmosphere. Upwelling of WSDW, occurring soon after it became dominant in high-latitude areas, is likely responsible for the recovery of normal salinity and the concomitant recovery of planktonic foraminifera and calcareous nannoplankton productivity in high-latitude surface waters. Minor benthic foraminiferal extinctions (9% of species) occurred ∼40 kyr after the major extinctions, lasted ≤ ∼6 kyr, and coincided with the initiation of environmental recovery.