Abstract: The unclear understanding of the relationship between source rock and reservoir in the Xijiang Main Sag restricts the local Paleogene oil and gas exploration. Based on seismic, drilling, paleontological and other data, five sequence boundaries and four third-order sequences were determined and identified. The migration sequence evolution model featured with differential activation of preexisting faults and transformation of regional stress direction was established. In the initial stage of rifting (represented by Sequence WCSQ1), multiple centers distributed. In the strong rifting period (WCSQ2), it was thick in the eastern part of sag but thin in the western, with a “narrow strip” in the northeast direction. In the rifting transition period (WCSQ3), it was thick in the western part but thin in the eastern and in sheet-shaped distribution in the northeast. In the stage of collapse and shrinking (WCSQ4), it shows sheet-like distribution. Three depositional systems of braided river delta, fan delta, and lacustrine facies were identified in the Wenchang Formation. Two major depositional filling styles were recognized. The first is “steep slope” half-graben with deep-lake narrow basin in the WCSQ2, being rich in mud and poor in sand; and the second is “slope flat” half-graben with deep-lake wide basin in the WCSQ3, in sand-mud coexistence. Meanwhile, the relationship between source rock and reservoir was clarified: the middle-deep lacustrine high-quality source rock was mainly located in the eastern part of the WCSQ2 and the western depression center of the WCSQ3; braided river delta reservoir is mainly developed in the gentle slope zones of the WCSQ3 and WCSQ4; and fan delta reservoir is mainly developed in the steep slope zones of WCSQ2 and WCSQ3.