The latest Katian (Late Ordovician) is marked by the third biodiversity climax of the Great Ordovician Biodiversification Event (GOBE) prior to the Late Ordovician mass extinction (LOME). In this study, the Chemical Index of Alteration (CIA) is used to determine the paleoenvironmental change recorded in the Arisu Member, the Siltstone Member, and the Sandstone Member of the Terekawat (= Tierekeawati) Formation (upper Katian) in the Tarim Basin, northwestern China. CIA values from these members are plotted in A-CN-K ternary diagrams respectively. Linear regression and 95% confidence interval estimation results indicate that these deposits were derived from the same parent rock, and the corrected CIA (CIA(corr).) values reveal significant paleo-climate changes during Late Ordovician. Sea-surface temperatures (SSTs) have been estimated by comparing 31 modern estuary systems. These data show that the CIA(corr)(.) values dropped from 77.41 to 64.83, corresponding to an interpreted temperature drop from 20.5 to 10.2 degrees C in the Dicellograptus complexus graptolite Biozone of the upper Katian (Ka-4). CIA(corr). values varied within a range of 67.63-70.16, implying temperature fluctuations between 12.5 and 14.6 degrees C in the lower to middle Paraorthograptus pacificus Biozone. CIA(corr). values rose again from 69.09 to 76.05, corresponding to a temperature rise from 13.7 to 19.4 degrees C in the upper Paraorthograptus pacificus graptolite Biozone of the latest Katian. This is interpreted to be a cooling and warming cycle, corresponding to the mid-Boda cooling and the late-Boda warming events. This study suggests that the climate change during late Katian was more intense than previous thought, especially in subtropical zones of Paleo-Tethys. This cooling event enhanced the thermohaline ocean circulation and became one of the major factors causing the well-known late Katian faunal dispersal (i.e. the Boda event). Hirnantian glaciation would have further promoted global oceanic cooling, over-stressed the ecosystems, and triggered the LOME.