Abstract: Marine Paleozoic deposits are widely distributed in the Southern Yellow Sea basin.As the regional geological survey suggests, there are four groups of source rocks, i.e. the muddy source rocks of the lower Cambrian Mufushan formation, muddy source rocks in the Gaojiabian formation of late Ordovician and Wufeng formation of early Silurian, lime source rocks in the lower Permian Qixia formation and muddy source rocks in the upper Permian Longtan-Dalong formation. In this paper, the source rocks systematically evaluated through analysis of its characteristics in petrology and geochemistry. Results show that the lower Cambrian and lower Permian source rocks have high organic abundance and hydrocarbon generation potential belonging to the better-best rank; the upper Permian source rocks, which have high abundance of organic matter, but mainly terrestrial in origin, are ranked as better source rocks; whereas the Ordovician-Silurian source rocks are on common level. Resources calculation suggests that the resource of natural gas might reach 27469×10⁸m³ in total in the basin.