The formation mechanism of the oil shale developed in the 1st and 2nd members of Nenjiang Formation in Songliao Basin was studied by combining theoretical model with geological data such as total carbon content, sulfur isotope of pyrite, and whole rock element from the Songke-1 Well (south hole). Some conclusions have been reached:(1) It may not be fully correct to attribute the formation of oil shale to seawater intrusion into the lake basin. Although seawater invasion can lead to salinization of the lake and subsequent algae blooming, the change of bottom water redox condition caused by the invasion of oxygen-rich seawater into the bottom lake can inhibit the accumulation and preservation of organic matter in sediments; (2) The impact of seawater transgression on oil shale formation was mainly related to algae blooming caused by the continuous salinization of the lake water after transgression; (3) Volcanic tuff deposits are widely distributed in the Songliao basin and usually associated with oil shale deposits. The increase of productivity in ancient Songliao lake basin was directly related to nutrients such as phosphorus and iron brought by volcanic ash input; (4) The formation of oil shale in the Nenjiang Formation was controlled by a combination of mechanisms such as water eutrophication events induced by instantaneous mass input of volcanic ash and seawater invasion. It is concluded that organic matter enrichment in the oil shale is controlled by both water depth and the influence of sediment input from rivers.