The Toarcian Oceanic Anoxic Event (TOAE; Early Jurassic, ca. 182 Ma ago) represents one of the major environmental disturbances of the Mesozoic and is associated with global warming, widespread anoxia, and a severe perturbation of the global carbon cycle. Warming-related dysoxia-anoxia has long been considered the main cause of elevated marine extinction rates, although extinctions have been recorded also in environments without evidence for deoxygenation. We addressed the role of warming and disturbance of the carbon cycle in an oxygenated habitat in the Iberian Basin, Spain, by correlating high resolution quantitative faunal occurrences of early Toarcian benthic marine invertebrates with geochemical proxy data (δ¹⁸O and δ¹³C). We find that temperature, as derived from the δ¹⁸O record of shells, is significantly correlated with taxonomic and functional diversity and ecological composition, whereas we find no evidence to link carbon cycle variations to the faunal patterns. The local faunal assemblages before and after the TOAE are taxonomically and ecologically distinct. Most ecological change occurred at the onset of the TOAE, synchronous with an increase in water temperatures, and involved declines in multiple diversity metrics, abundance, and biomass. The TOAE interval experienced a complete turnover of brachiopods and a predominance of opportunistic species, which underscores the generality of this pattern recorded elsewhere in the western Tethys Ocean. Ecological instability during the TOAE is indicated by distinct fluctuations in diversity and in the relative abundance of individual modes of life. Local recovery to ecologically stable and diverse post-TOAE faunal assemblages occurred rapidly at the end of the TOAE, synchronous with decreasing water temperatures. Because oxygen-depleted conditions prevailed in many other regions during the TOAE, this study demonstrates that multiple mechanisms can be operating simultaneously with different relative contributions in different parts of the ocean.