Abstract: With reference to the research methods of shale oil formation in Biyang depression,the comprehensive research on shale oil formation in Nanyang depression has been carried out.The research results indicate shale was well developed in Hetaoyuan formation of Nanyang depression,with the characteristics of wide distribution,big thickness of singer layer,moderate buried depth,good organic matter type,high organic matter abundance,moderate thermal evolution degree,high brittle minerals contents,good compressibility,well developed micropores and microfractures and good reservoir physical properties.In shale well developed area,the faults are not developed but the preservation condition is good,being of the favorable conditions for shale oil formation.Multiple wells in deep-half deep lacustrine facies drilled good hydrocarbon shows in shale section,among which Hong-12 well acquired commercial oil flow,confirming shale oil formation existence in Nanyang depression.By using oil saturation method,the shale oil resources in Nangyang depreesion is about 2.85×108 t,which indicates good shale oil potential in Nanyang depression.In view of organic matter abundance and abnormal gas logging,Eh_23 and Eh_31 are favorable for shale oil enrichment and Hong 12 well is likely to be the most favorable area of oil shale exploration.