The alkaline lacustrine source rocks in the lower Permian Fengcheng Formation in the Mahu Sag, Junggar Basin, China, exhibit significant heterogeneity. However, most previous studies have focused on the vertical variability of the source rocks, and the lateral variability is poorly understood. This study investigated recently drilled samples of the Fengcheng Formation in the Manan area to assess the lateral variability of the source rocks. The geochemical characteristics of the Fengcheng Formation source rocks in the Manan area are variable, with low–high abundances of organic matter, which comprises types I–III kerogen that is mature to high-mature. These features differ from the typical Fengcheng Formation source rocks in the Wuxia–Fengcheng area, which have a high abundance of organic matter with substantial hydrocarbon and shale oil generation potential. Biomarker data show that the organic matter in the Fengcheng Formation source rocks in the Manan area is a mixture of higher plants, algae, and bacteria, which differs from the Wuxia–Fengcheng area where algae and bacteria are dominant. The Fengcheng Formation source rocks in the Manan area were deposited in an oxic to anoxic environment characterized by large variations in water salinity and stratification. Mudstones were deposited rather than carbonate rocks. This differs from the strongly reducing, hypersaline, and water-stratified depositional environment of the Fengcheng Formation source rocks in the Wuxia–Fengcheng area. These two areas are separated by the Dazhuluogou Fault, and there are no alkaline lacustrine deposits in the Manan area. The distribution of the alkaline lacustrine source rocks was controlled by the paleogeography and sedimentary environment, which was characterized by significant spatial heterogeneity.