Recent discoveries of huge tight oil resources in the middle Permian Lucaogou Formation within the Jimusaer sag in the Junggar Basin in northwestern China have aroused numerous studies on this unconventional petroleum system. However, depositional conditions of the source rocks and the accumulation models of the oils are still unclear because of the complexity of the petroleum system. In view of this, systematic geochemical investigations on 120 samples covering a whole variety of source and reservoir rocks in the Lucaogou Formation were carried out. Based on the results, two types of depositional conditions were identified for the five sections of source rocks (denoted A–E), with sections A, C, and D deposited under hypersaline and reducing conditions, and sections B and E under brackish and relatively oxidizing conditions. Oil-source rock correlation results demonstrated that four groups of oils (denoted 1–4) with distinctive geochemical signatures from the formation finally accumulated in three relatively independent subsystems (labeled Sub-I to Sub-III). Groups 2–4 oils (Sub-II and Sub-III) originated solely from interbedded mudstone, so the accumulation model is highly interbedded and nearby accumulation. Group 1 oils (Sub-I) are originated from the vertical mixing of hydrocarbons produced by multiple mudstone beds at greater depths followed by lateral migration, thus called vertical-lateral mixing accumulation model. This study highlights the importance of lateral migration in tight oil accumulation and will benefit future tight oil exploration in the Junggar Basin, such as the Permian Feng Cheng Formation, and other areas worldwide.