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Paleosalinity is an important environmental feature but it is difficult to evaluate. In the present study, paleosalinity was assessed during the deposition of three sets of source rocks in the western Pearl River Mouth Basin, South China Sea, utilizing four different kinds of methods, i.e., saturated hydrocarbon biomarkers, strontium abundance, non-pollen microalgae assemblies, and carbon-sulfur relationships. Results show that the second member of the Eocene Wenchang Formation (E2w2) was deposited in a freshwater environment and the Oligocene Zhuhai Formation (E3z) was deposited in a shallow marine environment. The Oligocene Enping Formation (E3e), which was believed to be deposited in a freshwater environment, was actually deposited in a brackish water environment. Mechanisms of salinity increase during the non-marine E3e deposition were mainly deep hydrothermal fluid input through the south boundary fault and episodic marine transgressions, not evaporation. The effect of salinity on organic matter content and type was investigated. Results show that salinity has no significant influence on total organic carbon (TOC) and hydrogen index (HI) of the E2w2, which was caused by the balance between freshwater algae and euryhaline algae. TOC and HI decrease with increasing salinity for samples from the E3z, which is contrary to the conventional hypothesis that marine transgressions promote source rock deposition. The decrease of TOC with carbon/sulfur ratios for samples from the E3e actually reflect the influence of thermal maturity but thermal maturity only plays the second role in HI. The effect of salinity on HI during the E3e deposition can be divided into two stages. During the first stage, the increase of salinity was mainly caused by deep hydrothermal fluid input without an oxygen level increase. HI values, therefore, remained relatively stable. During the secondary stage, the increase of salinity was mainly caused by marine transgressions which increased the oxygen level and as a consequence, HI decreased sharply with increasing salinity. This study provides a long-term salinity evolution of the western Pearl River Mouth Basin and suggests that salinity is an important factor controlling source rock deposition. In addition, this study presents an example that goes against conventional wisdom that marine transgressions promote source rock deposition in a shallow marine environment. This study also suggested that marine transgressions had already begun at the end of the early Oligocene.