The presence of shale oil in the Cretaceous Hengtongshan Formation in the Tonghua Basin, drilled by the well TD-01, has been discussed in this geological investigation for the first time. To evaluate the high-quality source rocks of Cretaceous continental shale oil, the distribution characteristics and the evolution of the ancient environment, samples of shale were systematically analyzed in terms of sedimentary facies, organic geochemistry, and organic carbon isotopic composition. The results demonstrate that a TOC value of 1.5% represents the lower-limit TOC value of the high-quality source rocks. Source rocks have an aggregate thickness of 211 m and contain abundant organic matter, with TOC values of 2.69% on average and a maximum value over 5.44%. The original hydrocarbon-generative potential value (S1+S2) is between 0.18 mg/g and 6.13 mg/g, and the Ro is between 0.97% and 1.40%. The thermal maturation of the source rocks is relatively mature to highly mature. The δ13C value range is between ?34.75‰ and ?26.53‰. The ratio of saturated hydrocarbons to aromatic hydrocarbons is 1.55 to 5.24, with an average of 2.85, which is greater than 1.6. The organic types are mainly type II1, followed by type I. The organic carbon source was C3 plants and hydrophytes. The paleoclimate of the Hengtongshan Formation can be characterized as hot and dry to humid, and these conditions were conducive to the development of high-quality source rocks. A favorable paleoenvironment and abundant organic carbon sources provide a solid hydrocarbon generation base for the formation and accumulation of oil and gas in the shale of the Tonghua Basin.