Recently a new oil shale belt was discovered in the Changshe Mountain area, northern Tibet, China. This belt, combined with the oil shale zone found in the Shengli River area, represents a large marine oil shale resource in China. Three facies associations have been recognized concerning the deposition of oil shale in the Qiangtang basin: flit vial-delta, tidal flat-lagoon and shallow marine facies associations. Oil shales were mainly deposited in lagoonal environments. The deposition of the Shengli River-Changshe Mountain oil shale may be controlled by many factors, such as sea level change, differential palaeotopography and palaeoclimate change. Sea level rise and consequent marine incursion may change the aquatic environment of pre-existing lagoon. Differential palaeotopography may control the lateral distribution of oil shale seam, while palaeoclimate change may be partially responsible for the vertical facies change from oil shale to gypsum-salt deposition.