The Japan Basin is an example of a western Pacific marginal basin that is bounded by an island arc. Such basins were produced by an extensional process that involves formation of new, hot sea floor below basins that are opening as newly created arc systems migrate away from the continental borderland or older arcs. Rapid deposition of sediment on the hot basin floors allows development of steep geothermal gradients in these sedimentary prisms. In these sedimentary basins, the relationship between temperature and strata age is such that the kerogen-hydrocarbon transformation occurs in young, shallow strata. The sealing effect of turbidite deposits and the presence of numerous gravity faults ensures entrapment conditions. Hydrocarbon potential of these basins can be evaluated by considering the age of basin opening, sedimentation rates adjusted for compaction, and heat-flow data.