Distinct parts of limestones within the upper Paleozoic Auernig Group of the Carnic Alps, Austria and Italy, are characteristic of cool-water carbonates. The Carnic Alps were between 5°N and 10°S paleolatitude during the late Carboniferous, a position confirmed by dasyclad algae and fossil plants. The floral association, occurrence of coal seams, and absence of evaporites indicate a humid tropical environment. The entire section lacks abiotic components of typical warm-water limestones: no ooids and no aggregates occur within the Auernig Group. Parts of the limestones show, surprisingly, a cool-water association of high-diversity bryozoans, brachiopods, crinoids, red algae, sponge spicules, and entomozoan ostracodes. The genesis of these limestones, atypical for a paleoequatorial setting, cannot be explained by changes in salinity, bathymetry, or terrigenous input. The water temperature, possibly linked with upwelling, nutrient supply, and paleoceanographic currents, is the most convincing cause of this unusual association. Paleoceanographic changes are interpreted as linked to contemporaneous glaciation-deglaciation cycles in Gondwana. This paper shows that cool-water carbonates in shallow-water environments are not necessarily nontropical, as generally interpreted. Future studies should consider water temperature, oceanic circulation, and availability of nutrients, supplementary to bathymetry, salinity, and latitude-related climate in interpretation of carbonate components.