The Upper Devonian–Lower Carboniferous Bakken Formation is a widespread siliciclastic unit in the subsurface of the Williston Basin that is subdivided into three members: lower and upper organic-rich shale members and a dolomitic, silty, and sandy middle member. Although the unit has become one of the most active oil plays in North America and numerous sedimentologic studies have been made, no consensus about the depositional environments of the middle member has been achieved. Previous studies suggested several depositional and sequence-stratigraphic scenarios, including lowstand offshore-shoreface, normal-regressive offshore-shoreface, incised estuary, and falling-stage shoreface complexes for the middle member. We propose a new depositional and sequence-stratigraphic model and compare it with some previous interpretations. This new model includes a basal transgressive systems tract (TST) embracing shelf deposits, a highstand systems tract comprising shelf to lower shoreface environments, and an upper TST encompassing a brackish-water embayment complex and offshore to shelf settings. Petrophysical characterization of the sedimentary facies reveals that bay-mouth cross-stratified fine-grained sandstone, flaser-bedded very fine grained sandstone formed in wave-dominated tidal flats, offshore-transition highly bioturbated interbedded very fine grained sandstone and siltstone, and tidal-flat very fine grained sandstone with common mud drapes possess the best reservoir qualities. Recognition of a restricted embayment within the Bakken middle member has major implications for both exploration and production. Embayment facies with good reservoir quality constitute good oil prospects in localized areas, whereas fully marine facies may represent good oil prospects of more regional extent.