Abstract: Hydrocarbon generation characteristics and mechanism of alkaline-lacustrine source rocks are one of the research leading edges and difficulties. Based on a case study in the Lower Permian Fengcheng formation in the Mahu sag of Junggar basin, by using comprehansive methods of artificial section and natural outcrop of the source rocks as well as oil and gas characteristic calibration, the paper studies hydrocarbon generation characteristics and mechanism of the alkaline-lacustrine source rocks, based on which petroleum resources are reestimated. Results show that the Fengcheng alkaline-lacustrine source rocks exhibit some unique characteristics in hydrocarbon generation such as high conversion efficiency, continued hydrocarbon generation, multi-phase generation peaks, long oil-generation window, light oil and high oil to gas ratio, all of which are different from conventional lacustrine high quality source rocks. The unique hydrocarbon generation mechanism should be attributed to organic and inorganic compositions of the source rocks. The bioprecursors in the source rocks are dominated by bacteria and algae, with bacteria much more developed. The unique mineral composition of the Fengcheng formation is characterized by the existence of both alkaline and volcanic minerals that play retarding and catalytic roles on hydrocarbon generation, respectively, which allows early and continued hydrocarbon generation, multi-phase generation peaks and long oil-generation window of source rocks. According to these, the reestimation of petroleum resources in the study area is as follows: the oil generating volume is increased by 25% and the gas generating volume is decreased by 13%, which are more accordant with the present-day exploration results and have significance for making future exploration strategies