A new set of geochemical, petrographical and mineralogical data on important petroleum source rocks from Eocene Shahejie Formation in the Bohai Bay Basin, Eastern China is presented to investigate organic matter precursor material, thermal maturity and paleoenvironment during deposition of the Es3U, Es3L, Es3M and Es4U members. Different maturity parameters determine early mature to peak oil mature stages and maturity increase with burial depth. Alginite is the predominant maceral, whereas vitrinite and inertinite are rare. Studied shales and marlstones were deposited under episodic PZA as revealed by aryl isoprenoids. Bottom water conditions were anoxic most of the time except for Es3M. A fairly uniform biomarker composition displayed in Es4U indicates relatively stable hypersaline lake conditions with a shallow chemocline based on the high Gammacerane Index ˃0.6 and abundant aryl isoprenoids. Salinity changed during deposition of Es3L according to variable C24 Tet-related parameters and evaporite minerals content. The aquatic algal organisms, i.e. haptophyte algae, diatoms and bryophytes which are reflected by abundant nC37–39 alkanes, a variable sterane pattern, and other biomarkers, were flourishing during Es3L. Small concentration of specific PAHs, i.e. retene, cadalene, fluoranthene, indeno[1,2,3-cd]pyrene and benzo[ghi]perylene in Es3L, may be attributed to limited terrigenous input. Es3M was deposited in a normal lacustrine environment under rather low salinity conditions with substantial input of organic matter derived from algae. During Es3U, saline lake conditions were re-established accompanied by algal and microbial input, especially cyanobacteria as deduced from MMAs and 2α-MeHs, methanogens from abnormally abundant phytane, PMI, squalane, and methanotrophs from 3β-MeHs.