A total of 225 rock samples and 37 oil samples from the Beibuwan Basin, South China Sea, were analyzed with geochemical and organic petrological techniques to evaluate the Eocene lacustrine source rocks and investigate controls on their properties and the distribution of different oil families in the basin. Two types of organic facies are recognized in the Liushagang Formation (LS). The first organic facies is algal-dominated and mainly occurs in the organic-rich, laminated mudstones of the middle member of the LS (LS-2) that were deposited in an anoxic, stratified, medium–deep lake environment. It is geochemically identified by its high abundance of C30 4-methylsteranes and heavy δ13C values in the range of −22.4‰ to −27.5‰. The organic matter in this organic facies comprises type I and II1 kerogens, with its macerals dominated by fluorescent amorphous organic matter (AOM) and exinites, indicating a highly oil-prone character. The second organic facies is of terrestrial algal origin and is mainly identified in the nonlaminated mudstones of the upper (LS-1) and lower (LS-3) members of the LS that were deposited in shallow, dysoxic, weakly stratified, freshwater environments. Source rocks of the second organic facies mainly contain type II1–II2 kerogens with mixed macerals of AOM, internites, and vitrinites. It is geochemically differentiated from the algal-dominated organic facies by its relatively low abundance of C30 4-methylsteranes and lighter δ13C values in the range of −27.20‰ to −28.67‰. Three oil groups are identified by their biomarkers and stable carbon isotopes. The first two groups (A and B) are probably end-members of two major oil families (A and B) that correspond to the algal-dominated organic facies and algal–terrestrial organic facies, respectively. Most of the discovered oils belong to group A oils that are characterized by a high abundance of C30 4-methylsteranes and heavy δ13C values and show a good correlation with the algal-dominated organic facies in LS-2. Group B oils are found only within the LS-1 and LS-3 reservoirs, and they are recognized by their relatively low content of C30 4-methylsteranes and lighter δ13C values, showing a close relation to the algal–terrestrial source facies within the LS-1 and LS-3 members, respectively. Group C oils display intermediate biomarker features and stable carbon isotope values and are interpreted to be a mixture of group A and B oils. The oil–source correlation reveals a strong control of organic facies on the geographic distribution of oil groups or oil fields in the basin.