The Songliao Basin located in northeastern China is the country´s most oil-productive basin. It is interpreted as a Mesozoic-Cenozoic rift basin. Prolific source rocks occur in the Qingshankou and Nenjiang formations deposited during the Late Cretaceous post-rift phase. The most prolific source rock unit forms part of the first member of the Qingshankou Formation, where the rocks locally reach oil shale quality. The main aim of the present study was to reconstruct the depositional environment of the organic-rich sediments of the Qingshankou Formation. In addition, the source rock potential and the maturity of the organic matter were evaluated. A total of 70 well core samples from borehole NGN-dgk-02 were studied using Leco analysis (sulphur, inorganic and organic carbon content) and Rock Eval pyrolysis. A subset of the samples was selected for biomarker and isotope analysis, vitrinite reflectance measurements and maceral analysis. One additional sample representing an oil-stained sandstone from the Quantou Formation underlying the Qingshankou Formation was analysed to define the source of the oil. The results of this study show that deposition of the first member of the Qingshankou Formation commenced in a lake with relative high salinity. The increase in salinity may reflect a marine inflow. Salinity stratification induced anoxic conditions, which reached upwards into the photic zone. Bioproductivity was high at the same time. Organic-rich sediments with TOC contents up to 24 % and containing type I kerogen were deposited in this environment. During the deposition of the overlying sediments, the salinity and bioproductivity decreased significantly. Nevertheless, sediments with TOC contents up to 4 % have been deposited. The organic matter is immature to marginal mature. The oil from the Quantou Formation was generated from sediments of the Qingshankou Formation with higher maturity implying migration from a deeper part of the basin.