Three distinct continental marginal basin types developed in the South China Sea, i.e. divergence, transform‐extensional and flexural‐extensional complex types, due to different boundary conditions. Differences of tectonic evolution in these basins resulted in great variations in sedimentary fill and associated hydrocarbon accumulating conditions. Source rocks of lacustrine and marine mudstones mainly developed in northern diverging continental marginal basins in the northern South China Sea. Although there developed good lacustrine sources, limited hydrocarbon accumulation occurred in the adjacent areas around these separated depressions with a relative small scope distribution. In the southern flexural‐extensional complex continental marginal basins of the South China Sea, the Zengmu basin underwent the peripheral foreland tectonic stage earlier than other basins such as the Liyue, Beikang and Nanweixi basins. An available hydrocarbon accumulating condition occurred in those basins, where there are not only large areas and thicknesses of depressions with the sources of coal‐bearing and marine mudstones, but also formation of a broad carbonate and reef reservoirs resulted from slow subsidence during the terminating period of the South China Sea spreading (about 15.5 Ma). The transform‐extensional basins in western continental margins of the South China Sea are characterized by natural gas accumulation due to very thick sediments and high heat flow values. Considering all kinds of geological conditions mentioned above, we suggest that the hydrocarbon‐bearing prospects in southern continental marginal basins are superior to the northern continental marginal basins.