Organic carbon rich rocks in the c. 2.0 Ga Zaonega Formation (ZF), Karelia, Russia, preserve isotopic characteristics of a Paleoproterozoic ecosystem and record some of the oldest known oil generation and migration. Isotopic data derived from drill core material from the ZF show a shift in δ13Corg from c. −25‰ in the lower part of the succession to c. −40‰ in the upper part. This stratigraphic shift is a primary feature and cannot be explained by oil migration, maturation effects, or metamorphic overprints. The shift toward 13C-depleted organic matter (δ13Corg < −25‰) broadly coincides with lithological evidence for the generation of oil and gas in the underlying sediments and seepage onto the sea floor. We propose that the availability of thermogenic CH4 triggered the activity of methanotrophic organisms, resulting in the production of anomalously 13C-depleted biomass. The stratigraphic shift in δ13Corg records the change from CO2-fixing autotrophic biomass to biomass containing a significant contribution from methanotrophy. It has been suggested recently that this shift in δ13Corg reflects global forcing and progressive oxidation of the Earth. However, the lithologic indication for local thermogenic CH4, sourced within the oil field, is consistent with basinal methanotrophy. This indicates that regional/basinal processes can also explain the δ13Corg negative isotopic shift observed in the ZF.