The understanding of hydrocarbon generation has been continuously developed. Although hydrocarbon generation through kerogen late thermal degradation has been widely accepted by most scholars, there has been no systematic understanding of whether organic matter can be converted to oil and gas under immature conditions. This paper systematically reviewed hydrocarbon generation characteristics of Quaternary sediments and modern biology in China and abroad, and summarized the understanding of organic matter sources of shallow sediments, hydrocarbon generation potentials, and hydrocarbon generation models, investigating the development trends and suggestions of shallow sediment hydrocarbon generation characteristics. There is abundant soluble organic matter in modern sediments, and only 0.1%~2% of primary organic matter is preserved into the late diagenetic stage, among which fatty acids are an important material to transform into liquid hydrocarbon in an immature stage. The thermal simulation experiments of algae, resin and sporopollen show that lipids of special organic matter can be transformed into liquid product without undergoing a kerogen stage under low temperature catalysis. The pyrolysis products show that the content of asphaltene and resin is much higher than that of total hydrocarbon, and polar fractions are continuously transformed into total hydrocarbon fractions. The hydrocarbon generation path is the transformation of primary organic matter into soluble organic matter, and evolution of soluble organic matter into hydrocarbon by removing the heteroatom functional groups. Furthermore, the hydrocarbon generation of modern organisms can be divided into four stages, i.e., original stage, early hydrocarbon generation, hydrocarbon generation peak and late hydrocarbon generation. However, the research into the mechanism, model and ability of hydrocarbon generation of modern sediments is relatively weak. At present, the research mainly focuses on single or multiple primitive organisms and lacks the mechanism recognition of evolutionary process and hydrocarbon generation transformation of primitive organisms from the beginning of sedimentation to the hydrocarbon generation threshold, and research methods still rely on the thermal simulation of organic matter, with temperature as the main controlling factor, but ignore the comprehensive geological process of soluble organic matter. It is suggested to develop diagenetic process experiments and isochronous detection technologies for hydrocarbon generation processes based on modern marine or lake deposition in the future, and improve the hydrocarbon generation mechanism from deposition to hydrocarbon generation threshold, strengthening the systematic simulation of the hydrocarbon generation process of modern sediments and the late evolution analysis of the products, in order to improve the understanding of hydrocarbon generation and provide more powerful theoretical support for the evaluation of oil and gas resources.