Middle to Upper Ordovician ironstone and associated sedimentary rocks of the West Asturian‐Leonese and Cantabrian tectonostratigraphic zones, Spain, provide new information regarding the Palaeozoic Fe cycle and the palaeoceanography of the Rheic Ocean. Examination of drill cores and outcrops indicates the southeastern margin of this narrow seaway was a dynamic continental shelf where upwelling of ferruginous seawater and storm currents controlled lithofacies character. Parasequence composition and stacking relationships suggest ironstone accumulated during marine transgression as accommodation increased from lowstand conditions. Proximal parasequences record aggradation from deep subtidal to shoreface environments. Hummocky cross‐stratified sandstone and organic‐rich siltstone grade upwards into swaley cross‐stratified sandstone and granular Fe‐silicate‐rich ironstone capped by a flooding surface. Distal parasequences were deposited below storm wave base on the distal shelf and are composed of variably bioturbated organic‐rich siltstone with thin Fe‐chlorite and phosphorite layers. These differences in parasequence character define two different ironstone factories where Fe was concentrated and precipitated in sediment. Lithofacies associations support an emerging model for ironstone deposition where coastal upwelling delivered and stimulated the precipitation of Fe within shelf sediment. This notion provides further evidence for the development of intermittent anoxic water masses in an Ordovician ocean that was near the threshold of becoming fully ventilated. This style of Fe delivery probably represents a tipping point in the oxygenation history of the Phanerozoic oceans and is a throwback to the Precambrian when widespread anoxia allowed hydrothermal Fe to concentrate in the global ocean. New data suggest that minor extinction events punctuating the Great Ordovician Biodiversification Event may be traced to these anoxic waters, which in addition to Fe, were also enriched in biologically toxic, redox sensitive trace elements. Conversely, precipitation of upwelling‐related ironstone may have helped sequester these trace elements, providing a negative feedback response that would aid post‐extinction recovery.