Abstract: Several organic-rich shales with oil and gas were developed in the Paleogene Hetaoyuan formation of deep area in Biyang sag. The trace and rare earth elements’ contents and indexes from the fifth shale were analyzed using ICP-MS method, including the geochemistry, the sedimentary environment and the organic-rich mechanism in this area. The results show that the changes in content of B, Sr, Th and B/Ga have a positive correlation with the change of paleosalinity, reflecting that such shales were deposited in saltwater lakes, and the gradual decline of the paleosalinity from bottom to top was consistent with the content and composition characteristics of the algae. The obvious differentiation of individual rare earth element indicates the enrichment of the light rare earth elements and the loss of the heavy ones, and these facts that the ratio of （La）N/（Yb）N is obvious greater than 1, the value of δCe ranges from 0.93 to 1.17 with an average of 0.99, being of unobvious or positive anomaly, which implies relatively low depositonal rate of the deposit. The value of V/(V+Ni) is between 0.71 and 0.84, and the value of Ce anomaly index of larger than-0.1 indicates the reducing environment. It is suggested that the fifth organic-rich shales of He-3 member of Hetaoyuan formation was developed in saltwater lake environment with low depositional rate and semiarid climate