Based on the geochemical data from the third Member of Shahejie Formation (E s 3),from the well Shenjian 5 in the Damintun sag, the sedimentary environment, geological structural background, parent rocks and provenance are studied in detail. Results show that the parent rocks of E s 3 are felsic volcanic rocks from the upper continental crust and the Archaean rocks. The A- CN- K, SiO 2- Al 2O 3, and the Th- Th/U discrimination diagrams display the low degree of chemical weathering in the Damintun sag. Based on cluster analysis, the vertical distribution characteristics of 10 element ratios such as Sr/Cu, Sr/Ba and V/(V+Ni) values are selected to reconstruct the paleoenvironment in the study area. Paleoclimate of the sag is mainly dry- heat from E s 4 3 Ⅱ to E s 3 3 Ⅲ, with low salinity and weak restore environment in the ancient lake. It shows that the significant influence of paleoclimate on the elemental distribution in the study area is mainly related to the depositional environment and closed tectonic environment in E s 3. The Damintun sag was situated in a tectonic background characterized by both continental island arc and passive continental margin, under the general background of subduction of the Pacific plate beneath the Eurasian plate in the late Jurassic- late Eocene stage. It is speculated that the sediments of E s 3 mainly came from the Archean migmatite and migmatite gneiss in the Archean metamorphic basement in this area and intermediate acid igneous rocks formed in the Mesozoic. The parent rocks were also affected by the volcanic activities in the late Eocene.