Based on regional geological survey, seismic data and organic geochemistry analysis, the Jurassic sedimentary characteristics and petroleum geological condition in the western Qaidam Basin are studied in this paper. It is indicated that there are two sets of strata developed in the western Qaidam Basin, one is Middle-Lower Jurassic dark coal bearing formation, including Xiaomeigou Formation and Dameigou Formation; another one is the Upper Jurassic red clastic rock formation developed in oxidation environment without hydrocarbon generating capacity. The dark mud shale developed in Middle-Lower Jurassic lacustrine facies is widely distributed in the study area with large residual thickness. About 288 m and 256 m thickness of source rocks are developed in the Yueyashan and Qingshuigou regions respectively. The organic geochemistry analysis shows that the average organic carbon abundance is 1.62%. The organic matters mainly belong to type II2 and partly type III. The source rocks is reaching the peak period of oil generation and discharging and are of better hydrocarbon generation capacity. The source rocks, reservoir beds and the cap rocks match each other well, and traps develops well, it can be concluded that the Jurassic in the western Qaidam Basin possesses relatively better petroleum geological conditions and good oil and gas exploration prospect.