Abstract: The source rocks of the Lunpola Basin were developed in the Tertiary Niubao formation and mainly in N-2 and lower N-3 members and some in upper N-3 member of the formation. Distribution of source rocks was controlled by sedimentary facies with deep- and subdeep-lake facies were their major developing area. The thickest source rocks were in Jiangri-Acuo depression. Source rocks were characterized by medium abundance of organic matter, good parent type and relative high maturity. Since the end of Eocene, there has been favorable source condition for hydrocarbon accumulation, and the early hydrocarbon came from N-2 member and the late one from lower N-3　member. In a word, there is good resource prospect in the Lunpola Basin.