Combined sedimentological and palaeontological studies of the vertebrate fossil-bearing deposits of the Upper Devonian, Upper Famennian Ketleri Formation provided new data on the sedimentary environment of the deposits, as well as taxonomical and taphonomical peculiarities of the fossil assemblage. Data from the mathematical model of the Baltic Devonian Basin demonstrate that the sandy deposits of the Pavāri and Varkaļi members form a fan-shaped area resembling a wide delta developed in shallow marine settings. Fluvial channels and bars with strong tidal influence were identified in sedimentological study of the Pavāri site, suggesting the tide-influenced fluvial environment. Taphonomic studies testify the sedimentary concentrations of well-preserved vertebrate remains were formed under the influence of fluvial and strong tidal processes in the shallow water environment, most probably tide-influenced deltaic settings. Trace fossils recognized in the Ketleri and Pavāri-1 site suggest brackish water or marine environment and thus support the hypothesis. The analysis of rhizocretes from the Varkaļi Mb allowed suggest the strong influence of a seasonal climate. Well-preserved plant macroremains have been found during this study for the first time from the Ketleri Formation.