Abstract: The element composition of mudstone may well preserve the original sedimentary information and is highly sensitive to the changes of sedimentary environment. In order to define the depositional environment of source rocks of the Enping Formation in the Baiyun Sag, mudstone samples from 5 drilling holes were selected for analysis of element composition. Studied are such paleoenvironmental parameters as paleo-water depth, paleo-oxygenation facies, paleoclimate, paleosalinity and burial efficiency during the Enping period in the Baiyun Sag. The results indicate that the West Baiyun Sub-sag was then a deep fresh water environment under cold-wet climate, weak reducibility, and lowest burial efficiency; the East Baiyun Sub-sag was located in the partly salted water environment under shallow water depth, wet-hot climate, weak reducibility and high burial efficiency; the Main Baiyun Sub-sag is located in a fresh water environment with deep water depth, warm-wet alternative climate, weak reducibility- reducibility and moderate burial efficiency, while the South Baiyun Sub-sag was located in an environment with generally shallow water depth, warm-wet climate and sub reducing environment, where salt water, semi salt water and fresh water are all observed, and fluctuated relatively high burial efficiency. The above environmental parameters reveal that the genetic and preservative conditions of source rocks in the Main Baiyun Sub-sag, East Baiyun Sub-sag and South Baiyun Sub-sag are highly qualified and much better than those in the West Baiyun Sub-sag.