Abstract: Based on regional geological survey, outcrop profile measurement and borehole logging, the authors analyzed sedimentary characteristics, distribution and organic geochemistry of hydrocarbon source rock in Upper Permian Linxi Formation, and the results show that late Permian Linxi Formation has wide distribution, large thickness, well-developed dark mudstones , and abundant organic matter. The abundance of hydrocarbon source rocks in Linxi Formation is from medium scale to good, the organic matter is mainly of typeⅡ, the thermal evolution of organic matters has entered the high mature-over mature stage and consist mainly of dry gas, thus Linxi Formation serves as important hydrocarbon source rock horizon. The comprehensive evaluation of Linxi Formation is likely to reveal higher shale gas resource prospect, and hence the formation is the most favorable late Paleozoic shale gas exploration formation in this area.