Benthic invertebrate communities in modern and fossil marine assemblages are heterogeneous at small spatial scales. When sampling within the same depositional environment to minimize water-depth variation, assemblage heterogeneity is commonly correlated with substrate variation. This study examines fossil assemblages and carbonate lithologies of the Lodgepole Formation from Milligan Canyon and Sappington Canyon in southwestern Montana to identify environmental gradients correlated with spatial variability in community composition. Forty-six field counts were collected from the deep subtidal, foreshoal, and ooid shoal depositional environments. Lithologic samples were collected with each field count, thin sectioned, and point counted under a light microscope to quantify lithologic compositions for every faunal sample. Additional lithologic data such as sedimentary structures and bioturbation were also described with each lithologic sample to refine lithofacies interpretations and paleoenvironments. Detrended correspondence analysis (DCA) of faunal samples from all lithofacies identifies an onshore-offshore gradient along Axis 1 from diverse brachiopod assemblages in the deep subtidal to rugose coral dominated assemblages in the foreshoal. DCA Axis 1 of deep subtidal samples identifies two biofacies: a rugose coral and productid brachiopod assemblage and a diverse brachiopod-crinoidal assemblage. DCA Axis 1 of foreshoal samples identifies two biofacies: a Spirifer centronatus dominated biofacies and a rugose coral dominated biofacies. Taxa ecology of each biofacies indicates a water-depth gradient may be correlated with the distribution of deep subtidal and foreshoal samples. Cluster analysis of point count data identifies three carbonate groupings: crinoid-rich, peloid-rich, and micrite-rich samples. When coded by lithologic clusters, DCA of deep subtidal samples identifies a substrate gradient along Axis 2 independent of the water-depth gradient on Axis 1. DCA of foreshoal samples identifies a substrate gradient along Axis 1, which is also correlated with water depth. This demonstrates high-resolution sampling of both faunal and lithologic data can identify sources of assemblage variation at small spatial scales and within the same depositional environment.