Color in sedimentary rocks is an important indicator to the climate and environmental conditions in which they formed.

When sediments are deposited, in addition to clastic particles such as sands, silts, and clays, they will also contain varying amounts of organic matter, for example fine particles of decaying plant material. The void spaces will typically also contain water which itself will be carrying dissolved ions, including iron (Fe²⁺), and dissolved gases, including oxygen.

The key ingredients here are organic matter, iron, and oxygen. In a sense, the organic matter and the iron compete for the oxygen with the organic matter having the upper hand.

If the sediment is rich in organic matter there may not be enough oxygen for decomposers in the sediment to completely respire (oxidize) all of the organic matter. The iron may precipitate reduced (low oxidation state) minerals such as iron sulfides. So the remaining organic matter will give the sediment and resulting sedimentary rock, a dark gray or black color.

If the sediment is poor in organic matter or well oxygenated there may be enough oxygen to allow all of the organic matter to decay, via respiration by decomposers, and have oxygen left over to oxidize the iron. Oxidized iron (Fe³⁺) forms the mineral hematite (Fe₂O₃) which makes the red color in redbeds.

Gray and black shales, and coal in the extreme case, indicate high organic matter and low oxygen in the sediments. These are typical in wet conditions such as in the equatorial rain belt, coastal marshes, and isolated temperate lowland marshes.

Red sandstones and shales indicate low organic matter or well-oxygenated conditions. Well-drained (dry=well-aerated) uplands on the flanks of eroding mountain ranges, especially with rapid deposition of coarse, immature sediments are conditions typically poor in organic matter, rich in iron, and well-oxygenated.