In the mid-Cenozoic, New Zealand underwent slow subsidence interspersed with unconformity development, however significant controversy exists around both the extent of submergence below sea level during this period of maximum drowning, as well as the causes of these unconformities. Detailed field observations, combined with extensive petrographic analyses, stable isotopes, cathodoluminescence, and thin section staining were used to develop lithofacies, depositional, and sequence stratigraphic models of the mid-Cenozoic succession in the Waitaki region, South Island, to address these controversies. Twelve facies types have been described for Late Eocene-Early Miocene sedimentary rocks, leading to the identification of two major (Mid Oligocene & Early Miocene) and one minor (Late Oligocene) sequence boundaries. Surtseyan volcanism in the east produced a palaeohigh, resulting in a submerged rimmed cool-water carbonate platform, with low-lying land to the west. This eastern palaeohigh developed karst during sea-level lowstands, which correlate with silty submarine bored hardgrounds in the west. Glauconitic and phosphatic facies deposited during early marine transgression suggest an authigenic factory supplied by terrigenous clays existed during lowered sea level that was progressively shut down in favour of a carbonate factory as sea level rose and terrigenous supply decreased. The eastern palaeohigh served to nucleate this carbonate factory by raising the sea floor above the influence of siliciclastic sediment supply and providing a shallow substrate for marine colonisation. The higher energy eastern facies display dissolution of aragonitic taxa, while deeper western facies retained an aragonitic assemblage. This early bathymetric high created a barrier to submarine currents, but was gradually reduced by erosion during subsequent lowstands. Calcareous facies were often subjected to minor seafloor cement precipitation to shallow burial diagenesis, while eastern facies developed some meteoric cement during subaerial exposure. Comparisons between sea-level change in the study area and the New Zealand megasequence indicate eustatic changes as the primary driver of water depth in the Waitaki region until the development of the modern plate boundary in the Early Miocene.