Shale gas is produced from fine-grained siliciclastic sediments that are typically rich in organic carbon. Nearly all shales contain thermal gas generated in situ at mature to overmature levels of thermal alteration, although gas of biogenic origin is also produced from some shales. While shale gas production in the USA began in 1821, it is only in the last few years that it has become widely significant (currently about 8% of the domestic gas). In contrast, European shale gas exploration is still in its infancy. In general, European sedimentary basins offer the best potential for shale gas occurrence because thick, organic matter-rich sediments occur in nearly all Phanerozoic strata. Even so, there is little knowledge about the factors controlling shale gas generation and, more importantly, shale gas production in European basins. These factors are not necessarily the same as those that control commercial shale gas production in the USA. Palaeozoic sediments of Cambrian to Ordovician age are currently being tested for their shale gas potential and productivity in Sweden, as are those of Silurian age in Poland. Moreover, Lower and Upper Carboniferous sedimentary successions from England in the west to Poland in the east probably contain shale gas, but their depth, thickness and thermal maturity may be limiting factors for exploration in continental regions. Lower Carboniferous black shales in the Dniepr–Donets Basin of the Ukraine may also hold a significant potential. Moreover, organic-rich sediments of Oligocene/Miocene age in the Paratethyan Basin may offer shale gas potential, for example in the Pannonian Basin. At present, Upper Jurassic black shales are currently being tested for their shale gas potential in the Vienna Basin. European analogues of known biogenic shale gas systems may occur locally in organic-rich Lower Cretaceous sediments in the North German Basin with gas generation being related to Pleistocene glaciation/deglaciation cycles.