Organic geochemical processes in hydrothermal alteration system in terrestrial areas were investigated in the Shimofuro geothermal field, Northeast Japan. This study describes a continuous long mudstone outcrop of the Middle to Late Miocene Yagen Formation on the Shimokita Peninsula, Aomori Prefecture. The outcrop located near Mt.Hiuchi‐dake shows sequential alteration with a color change from black to white. Contents of total organic carbon (TOC) vary from 0.00% to 0.46% according to litho‐color change and become higher for black and lower for gray to white. TOC contents show a negative correlation with SiO2 concentration. These indicate that TOC contents in the outcrop strongly depend on silicification caused by hydrothermal alteration. The mineral assemblages are composed of alunite, kaolinite, illite and pyrite, and indicate distinct alteration zones with acidic to neutral hydrothermal activities. Composition of the minerals formed by the alteration suggests that the temperature of hydrothermal fluid ranged from 150 to 250°C in a high‐sulfidation hydrothermal system. Regarding the extracted hydrocarbons, particularly n‐alkane distributions are significant. Values of Carbon Preference Index (CPI) increase up to 2.8 with increasing alteration and with decreasing TOC contents. This can be explained by two processes, (1) at the site of highly hydrothermal alteration, thermal cracking of organic matter in black mudstone strongly occurred and produced low‐molecular gaseous hydrocarbons, and (2) at the site of inner rock with a distance from the hydrothermal alteration, thermal cracking moderately occurred and produced medium to long chain n‐alkanes which were overlapped with original n‐alkanes. Very low Tmax values were found at the hydrothermal zone. This implies that natural extraction, migration, and precipitation of bituminous organic matter were driven by hydrothermal fluid.