The Jiyang Depression was a near-sea basin in Oligocene time with a mild and wet climate. The prosperous living matter in this basin and its continual depression created a favorable habitat for the generatian of oil. Occasional transpressions resulted in some particularities with regard to its water medium, giving rise to a unique biologicaI group,with either abundant terrestrial and fresh-water biota or organism characteristie of semisaline environments or small amounts of marine biota. Discussions are also given to the evolution of the organic matter on the basis of variation of geochemical indicators observed at different depths with respect to an oilgenerating bed in Dongying Depression.