Abstract: The Fengcheng Formation in the Mahu Sag of the Junggar Basin spans the Carboniferous and Permian boundary and represents a typical shale oil reservoir deposited in a marine to continental transitional environment. Comparative studies using scanning electron microscopy (SEM) and the chromium reduction method have revealed that the total sulfur content in this formation is significantly higher than that of the mudstones in the seventh member of the Triassic Yanchang Formation in the Ordos Basin, the Cretaceous Nenjiang Formation in the Songliao Basin, and the Paleogene Lower Ganchaigou Formation in the Qaidam Basin. In addition, pyrite of diverse morphologies develops, including euhedral and framboidal pyrite. However, relevant research on pyrite genesis in this formation is still at an early stage. Based on major element analysis and previous studies, the study concluded that intense volcanic activities and sulfates from the Paleo-Asian Ocean were the main sulfur sources of pyrite in the Fengcheng Formation, and the sulfur-bearing hydrothermal fluids were the secondary source. Riverine input of weathered materials had a relatively minor influence. Meanwhile, based on the characteristics of pyrite sulfur isotope composition (δ³⁴S), the evolution of the Fengcheng Formation was divided into two stages: Stage 1 extended from the top of the first member (C₂f₁) to the middle of the second member (C₂-P₁f₂) of the Fengcheng Formation. The variations in sulfate concentrations controlled by the connectivity between the ocean and the lake basin led to significant positive and negative deviations in δ³⁴S values. Stage 2 extended from the upper part of C₂-P₁f₂ to the third member (P₁f₃). The fluctuations in δ³⁴S values were mainly influenced by sedimentation rate. In addition, intense volcanic activities also caused negative deviations in δ³⁴S values. Studies on factors affecting sulfur isotope fractionation in pyrite of the Fengcheng Formation is beneficial for further understanding the sulfur cycle and reconstructing diagenetic and sedimentary models. Finally, based on the total organic carbon (TOC) content and water environment variations indicated by sulfur isotopes, it is concluded that increased lake basin openness, stratification of high-salinity water caused by strong evaporation, and intense volcanic activities are the key factors influencing the enrichment and preservation of organic matter in the Fengcheng Formation.