The Altai orogen (northwest China) represents the southwestern margin of the Central Asian Orogenic Belt. Geochemical and Nd–Sr isotope analyses were carried out on the Palaeozoic sedimentary and granitic rocks in order to trace their sources and to evaluate the pattern of continental growth of the orogen. Nd isotopic data for both the granites and sediments suggest a significant proportion of middle Proterozoic crust beneath the Altai orogen. However, addition of juvenile material (arc/back-arc oceanic crust) during Palaeozoic times is also significant. Trace elements and isotopic data of sediments suggest their sources were immature. They represent mixtures between a Palaeozoic juvenile component and an evolved continental crust. The early Palaeozoic sediments show εNd(T) = −3.4 to −5.0, TDM = 1.5–1.8 Ga, and ISr = 0.710–0.712. They represent a passive margin setting, with a predominance of evolved crustal material in the source. The Devonian sequences, however, might have been deposited in a back-arc basin setting, produced by subduction of the Junggar oceanic crust along the Irtysh fault. A significant addition of arc material into the sedimentary basin is responsible for the highly variable εNd values (−6 to 0) and ISr (0.711–0.706). The Carboniferous rocks were also deposited in a back-arc basin setting but with predominantly arc material in the source as suggested by an abrupt increase in εNd(T) (+6 to +3) and decrease in ISr (0.7045–0.7051). Voluminous syn-orogenic granitoids have εNd(T) = +2.1 to −4.3, ISr = 0.705–0.714 and TDM = 0.7–1.6 Ga. They were not derived by melting of local metasedimentary rocks as suggested by previous workers, but by melting of a more juvenile source at depth. Post-orogenic granites have higher εNd(T) (~ +4.4) than the syn-orogenic granitoids, indicating their derivation from a deeper crustal level where juvenile crust may predominate.