The gypsum bearing strata and high salinity spring have been found widely in the Jurassic strata of the Qiangtang basin in recent years, suggesting a potential for salt mineralization in the area. This study performed a comprehensive geochemical analysis in the Jurassic sediments in the Yanshiping area of the Qiangtang basin, combined with the sedimentary environments analysis, to reveal sea level fluctuations of Tethys Ocean, paleoclimate changes and potential of potassium deposit formation in the area. In order to obtain a clear indication of paleo proxies and using the sediments with gypsum, carbonate and detrital material, we employed the water and acetic acid to distinguish the elements from water soluble salts, carbonates and the silicate minerals in the bulk sediments. The results show that, ① the Fe/Mn ratios and CaCO3 content in the bulk samples indicate that Buqu and Suowa formations display high sea level with low Fe/Mn and high carbonate content due to the transgression of the Tethys Ocean; however, the Quemocuo and Xiali formations were in the regression stage with high Fe/Mn and low carbonate content. ② The chemical weathering proxies based on the oxides content in the silicate minerals, eg, the ratio of Na2O/Al2O3, and Na2 O/K2O in the acid insoluble fraction and chemical index of alternation (CIA), exhibit the much more arid paleoclimate with weak chemical weathering in the source areas periods of Buqu and Xiali formations, while the relatively less arid climate with strong chemical weathering in periods of Quemocuo and Suowa formations. ③ The K+ and Na+ contents in water soluble salts, which are sensitive proxies of salt formation, show the much higher concentrations in the Xiali Formation and low concentrations in other formations. Summarized by provenance, tectonics, paleoclimate, and palegeographical conditions, the results indicate the Xiali Formation has the great potential of potassium deposits in the Qiangtang basin. Because Tethys Ocean retreating from the east to the west of the Qiangtang basin in Jurassic and Yanshiping locates in the eastern margin of the basin, there is no potassium deposits formation but some gypsum outcrop in this area. The further work of potassium deposits exploration should focus on the Xiali Formation in the central and western part of the Qiangtang basin.