Through field outcrop survey, lithology observation and systematic sampling, and with the help of scanning electron microscope, rock pyrolysis, biomarker compound test and analysis, the comprehensive analysis of source rock characteristics and paleoenvironment in the study area is carried out. The lithology at the bottom of Longmaxi Formation of Lower Silurian in Western Hubei is mainly dark carbonaceous shale, the mineral composition is mostly clay minerals, quartz and feldspar, the content of illite and kaolinite is high, with a minor amount of strawberry pyrite and graptolite fossils. The test and analysis show that the total organic carbon content (TOC) of the source rock is 0.8%~6.32%, the average value is 3.42%, and the vitrinite reflectance (Ro) is 1.57%~2.95%. The type of organic matter is mainly type Ⅱ2. The overall abundance of organic matter is high, and the degree of thermal evolution has reached the stage of high mature and over mature. All these have become the good material basis and conditions for the formation of shale gas. The paleoenvironment of the source rocks indicates that the organic matter is from a mixed source of planktonic algae and bacteria. The large amount of hopane also indicates that the bacterial activity is strong during the deposition of organic matter. The water body of the ancient lake is freshwater environment as a whole with brackish water environment in some parts. The redox property of the water body fluctuates little, and is generally in a strong reduction environment. The body of water has certain stratification, which is also conducive to the preservation of organic matter, and provides a new direction for oil and gas exploration in Western Hubei.