Oil group separation, gas chromatography–mass spectrometry analysis of saturated hydrocarbons, carbon isotope analysis of fractions and tests on trace elements were all carried out to determine the origin of shallow Jurassic heavy oils in the northwestern margin of the Junggar Basin, northwestern China. Results showed that all the crude oils had been subjected to different degrees of biodegradation, on an order ranging from PM 6 to 9, which yielded many unresolved complex mixtures (UCM) and formed a huge spike in the mass chromatogram (M/Z = 85). Two heavy oils from the Karamay area underwent slight biodegradation, characterized by the consistent ratios of biomarker parameters. C21/C23 and C23/H of the two samples were 0.81 and 0.85, while G/H, C27/C29 and C28/C29 were 0.38 and 0.40, 0.16 and 0.27, 0.87 and 0.86, respectively. The isomerization parameters of terpane and steranes were 0.50–0.53, and 0.48–0.49, respectively. The above geochemical indices indicated that the crude oils in the study area were in the marginally mature stage. The parent materials were a mixture, consisting of bacteria, algae and some higher plants, formed under reducing depositional conditions, which is in agreement with the source rocks of the Fengcheng Formation in the Mahu depression. The carbon isotopic compositions of saturated hydrocarbon, aromatic hydrocarbon, NSO and asphaltene were ?31‰? to ?30.3‰, ?29.5‰ to ?29.03‰, ?29.4‰ to ?28.78‰ and ?28.62‰ to ?28.61‰, respectively. These findings are in agreement with the light carbon isotope of kerogen from the lower Permian Fengcheng Formation. Furthermore, V/Ni and Cr/Mo of all the crude oils were 0.01 to 0.032, 0.837 to 10.649, which is in good agreement with the ratios of the corresponding elements of the extracts from the Fengcheng Fm. carbonate source rock. As a result, a two–stage formation model was established: (1) the oil generated from the carbonate source rocks of the Fengcheng Formation migrated to the Carboniferous, Permian and Triassic traps during the Late Triassic, forming the primary oil reservoirs; (2) during the Late Jurassic period, the intense tectonic activity of Yanshan Episode II resulted in the readjustment of early deep primary reservoirs, the escaped oils gradually migrating to the shallow Jurassic reservoir through cross-cutting faults, unconformities and sand body layers. The oils then finally formed secondary heavy oil reservoirs, due to long–term biodegradation in the later stage. Therefore, joint methods of organic, isotopic and element geochemistry should be extensively applied in order to confirm the source of biodegradation oils.