Abstract: Yanqi Basin, located in the east of South Tianshan orogenic belt, is a Mesozoic-Cenozoic coal-bearing basin formed on the Hercynian folded basement. As a small Jurassic petroliferous basin in western area, Yanqi basin has its own unique geological conditions besides similarity with Tarim and Turpan-Hami basin. It is a reformed basin of hydrocarbon-generating coal stratum and high geothermal gradient. Research shows that characteristics of coal measure source rocks determine hydrocarbon capacity while high geothermal gradient drive oil and gas generation. Analysis on present geothermal measurement and thermal conductivity shows that the major cause of present high geothermal gradient in Bohu depression of Yanqi basin is high terrestrial heat flow and it is believed that the origin of the high geothermal gradient is from deep underground. On the basis of types, characteristics, distribution and organic maceral including vitrinite, inertinite, exinite and sapropelinite of Jurassic coal measure source rock, evaluation of oil-gas tendency and heat-press simulation experiment, analysis on liquid and gas hydrocarbons yield of coal rock, carbonaceous mudstones and coaly mudstone of middle-lower Jurassic were carried out. The conclusion shows that liquid hydrocarbons yield are, in order, coal rock, mudstones and carbonaceous mudstones respectively and gas hydrocarbons yield are, in order, mudstones, coal rock and carbonaceous mudstones respectively.