Abstract: Mahu sag is one of the most prolific oil?gas sags in the Junggar basin. The high?quality lacustrine source rocks in the Lower Permian Fengcheng formation are considered as the oldest alkaline lacustrine deposits, which provides the resource foundation for the formation of hundreds of miles oil province in northwestern margin of Junggar basin. Based on the investigations of regional geology, sedimentology, mineralogy and petrology, Fengcheng formation is inferred to be developed in the post-orogenic extensional fault depression which is found on the Paleozoic basement in the western Junggar basin. The formation is overall a set of fan delta?lacustrine deposits with the depocenter in the center of Mahu sag. Abundant alkaline minerals are observed in the Fengcheng formation, including reedmergnerite, northupite, shortite, searlesite, eitelite, wegscheiderite and nahcolite etc., which indicates a representative alkaline lacustrine facies with high salinity, distinct from other common saline-lake deposits. The presence of shortite, wegscheiderite, reedmergnerite and searlesite confirms that the alkaline lacustrine source rocks of the Fengcheng formation were deposited in a closed and high salinity lacustrine environment highly effected by deep hydrothermal fluids, not due to evaporation, which is also strongly associated with volcanic activities under the extensional fault depression setting