Abstract: The Xihu Sag of the East China Sea Shelf Basin is dominated by low-ultra-low permeability natural gas resources. The Eocene Gemstone Formation and the Pinghu Formation are the two main source rock formations in the sag. Although the predecessors have conducted a lot of research on their geochemical characteristics and sedimentary facies, the differences and changes in the source rocks of the Gemstone Formation and the Pinghu Formation in terms of paleosalinity differences, evolution of redox conditions, and paleoclimate fluctuations are still unclear, which restricts the study of the correlation between low-ultra-low permeability resources and paleoenvironment. In this paper, the mudstone samples of Well N1 in Pinghu slope zone of Xihu Sag are taken as the research object. The main elements are analyzed by X-ray fluorescence spectrometry (XRF), the trace elements are analyzed by inductively coupled plasma mass spectrometry (ICP-MS), and the saturated hydrocarbon content of biomarkers is analyzed by gas chromatography-mass spectrometry (GC-MS). Based on the analysis results, the paleosedimentary environment of the source rocks of the Baoshi Formation and Pinghu Formation in Well N1 is reconstructed. The results show that Sr/Ba (＜0.5), Rb/K and wax index jointly reveal that the sedimentary period of Baoshi Formation and Pinghu Formation is freshwater-brackish water environment. U/Th＜0.75, V/Cr＜2, δU＜1 and Pr/Ph＞2 synergistically indicate that the oxidation environment is dominant, and the elements are consistent with the biomarker parameters. It is confirmed that the oxidation is gradually enhanced from the Baoshi Formation to the Pinghu Formation; the climate index C＞0.6 and Sr/Cu＜10 support warm and humid sedimentary paleoclimate, with vertical fluctuations. The ratios of steroids to terpenoids C₂₇R/C₂₉R and C₁₉TT/C₂₃TT indicate that the Pinghu Formation received more terrigenous input than the Baoshi Formation. Multivariate geochemical parameters provide important evidence for the reconstruction of paleoenvironment in the Eocene sedimentary period of Xihu Sag.