The lacustrine shale of the Upper Cretaceous Qingshankou Formation is the principal prospective unconventional target lithology, acting as source, reservoir, and seal. Lithofacies and associated storage capacity are two significant factors in shale oil prospectivity. This paper describes an investigation of the lower Qingshankou Formation lacustrine shale based on detailed description and analysis of cores, shale lithofacies characteristics, depositional setting, and stacking patterns.Seven lithofacies are recognized based on organic matter content, sedimentary structure, and mineralogy, all exhibiting rapid vertical and lateral changes controlled by the depositional setting and basin evolution. An overall trend from shallow-water to deep-water depositional environments is interpreted from the characteristics of the infilling sequences, characterized by increasing total organic carbon (TOC) and total clay content and decreasing layer thickness (i.e., from bedded to laminated then to massive sedimentary structures). Periods of deposition during shallowing cycles show a reverse trend in the sedimentary characteristics described above. The sedimentary rocks in the studied interval show three complete short-term cycles, each one containing progressive and regressive system tracts.