Abstract: The lacustrine organic-rich shale in the Permian Lucaogou (LCG) Formation of the Jimsar Sag, Junggar Basin, is one of the main shale oil plays in China. In this paper, geological and geochemical research techniques were employed to evaluate the geochemical variability of the lacustrine shale and the production of organic matter and its preservation conditions. The LCG Formation is characterized by its complex mineral compositions and a wide range of organic matter richness and quality. The presence of high proportions of β-carotane and C29 steranes, indicates that the organic matter mainly originated from phytoplankton and aquatic algal-bacterial organisms, especially cyanobacteria. This study found that the productivity of the Lower LCG Member (P2l1) was highest, and the Middle LCG Member (P2l2) was the lowest. During the deposition of the Lower LCG Member, the lake's bottom water was predominantly a reducing environment, and the degradation of organic matter was largely a result of bacterial sulfate reduction. During the deposition of the Middle and Upper LCG members, the lake's bottom water was mainly oxidizing, and the degradation of organic matter was likely to be caused by aerobic processes. Based on a comprehensive analysis of the origin and production of organic matter, as well as its depositional environment and preservation conditions, two organic matter accumulation models were proposed to explain the distribution of the organic-rich shale. In model A, the high influx of volcanic ash released nutrients and brought abundant sulfate into the water, the accumulation of organic matter was mainly controlled by the preservation of organic matter, which was mainly controlled by BSR. In the model B, the influx of volcanic ash was small, organic matter was mainly degraded by oxygen and the accumulation of organic matter is mainly determined by the production of organic matter.