We analyzed the tectonic evolution characteristics, sedimentary environment, geochemical characteristics, petrological characteristics, and gas-bearing properties of three mudstone sections of the Lower Paleozoic in Ningwu Basin, NE China, and determined the geologic characteristics and resource potential of the transitional facies shale gas. Geochemical analysis of the organic carbon content, kerogen macerals, and vitrinite reflectance of the shale samples showed that the total organic content was generally over 2.0%, the main organic type was type III, and the vitrinite reflectance values (Ro) were between 1.20 and 1.90%. Thus, the mudstones are good shale gas source rocks. The thickness of the three mudstone sections was approximately 30-70 m, and the average porosity was 3.10%. The pore types were diverse with good reservoir capacity. The shale gas resources of the Carboniferous-Permian transitional facies estimated by the volumetric method were approximately 2798.97 Â 10 8 -4643.09 Â 10 8 m 3. Through a comparison with shales in SW China, where shale gas has been successfully exploited, we determined the preferred criteria for favorable shale gas areas, as well as favorable areas for shale gas enrichment.