The Middle Liassic carbonate succession of Mt Velika Kapela is composed of coarsening-upward cycles. Analysis of facies alternation and stacking pattern reveals a sporadic appearance of oolitic facies indicating oolitic shoal progradation from neighbouring topographic highs. These progradations interrupted the constant “in situ” carbonate sediment aggradation, which produced typical coarsening-upward architecture. Two types of coarsening-upward cycles were distinguished: 1 — cycles with peloidal-bioclastic upper cycle members, and 2 — cycles with oolitic upper cycle members. These coarsening-upward cycles are regarded as a record of the sea-bottom oscillations below and above the fair-weather wave-base and model for evolution and cyclic response of carbonate facies to these oscillations is presented.