The historic Yinggelike nephrite jade deposit in the Altyn Tagh Mountains (Xinjiang, NW China) is renowned for its gem-quality nephrite with its characteristic light-yellow to greenish-yellow hue. Despite the extraordinary gemological quality and commercial significance of the Yinggelike nephrite, little work has been done on this nephrite deposit, due to its geographic remoteness and inaccessibility. This contribution presents the first systematic mineralogical and geochemical studies on the Yinggelike nephrite deposit. Electron probe microanalysis, X-ray fluorescence (XRF) spectrometry, inductively coupled plasma mass spectrometry (ICP-MS) and isotope ratio mass spectrometry were used to measure the mineralogy, bulk-rock chemistry and stable (O and H) isotopes characteristics of samples from Yinggelike. Field investigation shows that the Yinggelike nephrite orebody occurs in the dolomitic marble near the intruding granitoids. Petrographic studies and EMPA data indicate that the nephrite is mainly composed of fine-grained tremolite, with accessory pargasite, diopside, epidote, allanite, prehnite, andesine, titanite, zircon, and calcite. Geochemical studies show that all nephrite samples have low bulk-rock Fe/(Fe + Mg) values (0.02–0.05), as well as low Cr (0.81–34.68 ppm), Co (1.10–2.91 ppm), and Ni (0.52–20.15 ppm) contents. Chondrite-normalized REE patterns of most samples exhibit strong to moderate negative Eu anomalies (0.04–0.67), moderate LREE enrichments, nearly flat HREE patterns, and low ΣREE contents (2.16–11.25 ppm). The nephrite samples have δ18O and δD values of 5.3 to 7.4‰ and –74.9 to –86.7‰, respectively. The mineralogy, bulk-rock chemistry, and O–H isotope characteristics are consistent with the dolomite-related nephrite classification. Based on mineral paragenetic relationships, three possible mineral crystallization stages are recognized: (1) diopside formed by prograde metasomatism; (2) nephrite jade formed by retrograde metasomatism and replacement of Stage I anhydrous minerals; (3) hydrothermal alteration after the nephrite formation. Features of transition metal contents indicate that the color of the Yinggelike nephrite is likely to be controlled by the Fe2+, Fe3+, and Mn. Yellowish color is related to Mn and especially Fe3+, while greenish color is related to Fe2+. Our new mineralogical and geochemical results on the Yinggelike nephrite provide better constraints on the formation of other nephrite deposits in the Altyn Tagh Mountains, and can facilitate future nephrite prospecting and research in the region.