Abstract: With the help of sequence stratigraphy, paleogeomorphology, paleontology data, the relationship of sedimentation rate and accommodation space, typical seismic facies, cross sections and spatial analysis of seismic and sedimentary facies, in addition to the regional geological data and previous research achievements, we made a careful research on stratigraphic sequence, influence factors, spatial distribution pattern and depositional model of the source rocks in the south subsag of the Baiyun Sag. It is concluded that while the Enping Formation was deposited, it was a continent marginal, semi-closed and un-compensated moist bay, surrounded by uplifts and faults. The Formation itself consists of a complete second-grade sequence, which can be further subdivided into three third-grade sequences, namely the SQ1, SQ2, SQ3. The maximum flooding surface of the SQ3 coincides with the maximum flooding surface of Enping sequence. As an epicontinetal sea, the south subsag of Baiyun Sag used to have favorable conditions for deposition of high quality marine source rocks, and the rather stable paleotectonic background contributed as well to the enrichment and preservation of organic matters. The sedimentation rate was low then, and even lower than the rate of the increase in accommodation space. As the result, sedimentation retrograded towards land, and water was getting deeper. All the factors lead to a favored environment for accumulation of marine source rocks.