Tight oil in the Permian Tiaohu Formation in the Santanghu Basin, northwest China, has a peculiar property such that the reservoir is sedimentary organic matter-bearing tuff characterized by high porosity (10%–25%) and very low permeability, mainly in the range of 0.01–0.50 mD. Biomarker and stable carbon isotope compositions of selected crude oils and source-rock extracts were analyzed to determine the source rock of the tight oil. Source rocks in the Lucaogou Formation consist of various rock types dominated by mudstones containing organic matter with intense yellow–green fluorescence. Mudstones in the Lucaogou Formation have total organic carbon (TOC) values mainly in the range of 1.0–8.0 wt%, hydrocarbon generation potential (S1 + S2) mostly >6 mg/g, and chloroform extractable bitumen “A” generally >0.1%. The maceral composition is predominantly fluorescing amorphinite. The hydrogen index (HI) varies from 300 to 900 mg HC/g TOC, indicating dominant Type I and Type II kerogen. Compared with the mudstones and tuffs in the Tiaohu Formation, the mudstones in the Lucaogou Formation are the best source rocks. The biomarker characteristics of mudstone extracts in the Lucaogou Formation differ from those in the Tiaohu Formation, based on the gammacerane index, β-carotane content, and the relative contents of C27, C28, and C29 regular steranes. Crude oil samples in the tuff show low pristane/phytane (Pr/Ph) ratios, high gammacerane indices, high β-carotane, and a dominance of the C29 regular sterane followed by C28 and C27 steranes, as well as depleted stable carbon isotope compositions. Oil–source correlation with biomarkers and δ13C values shows that the crude oil in the tuffs mainly originates from underlying source rocks in the Lucaogou Formation. The sedimentary organic matter in the tuffs also makes a small contribution to the tuffaceous reservoir. Therefore, the tuffaceous tight reservoir in the Tiaohu Formation is unusual in that the oil is not indigenous; rather, it migrates a long distance to accumulate in the upper reservoir.