The Junggar basin is rich in oil and gas resources, and recently, unconventional oil and gas reservoirs have become important targets. Significant amounts of oil and gas are located in Permian formations in the Shazhang-Dajing area, however, fewer studies have focused on unconventional oil and gas reservoirs, particularly on the factors controlling the distribution of unconventional reservoirs. In this study, a sequence stratigraphic framework of the study area was developed based on cores, well logs and seismic data. Source rock samples were analyzed, including tests of kerogen, vitrinite reflectance, chloroform bitumen, organic carbon and group composition. The physical properties and pore characteristics of reservoir samples were also analyzed using scanning electron microscope and high resolution electron microscope. The Permian Pingdiquan Formation comprises three thirdorder sequences in which individual sequence can be divided into a low-stand system tract (LST), a transgression system tract (TST), an early high-stand system tract (E-HST), and a late high-stand system tract (L-HST). Several source rock lithologies have high total organic carbon (TOC), and are matured, having excellent hydrocarbon generation potential. Clastic and dolomitic rocks are the main reservoirs, and nanometer-scale pores are the main reservoir space in the tight reservoirs. The distribution of tight oil is controlled by the sequence stratigraphy, palaeogeomorphic units, and sedimentary facies. The fine sediments, which were generally deposited near the initial flooding surface (FFS) and the maximum flooding surface (MFS), are favorable zones for tight oil. The distributions of the hydrocarbon source rocks are controlled by the depositional environment, depending on the palaeogeomorphic units; the deep depression in the Huoshaoshan area and the moderately-deep depression in the Shishugou area are two distinct hydrocarbon generating centers. The distribution of tight oil is clearly controlled by the sedimentary facies; the tight oil is mainly located in the fan delta front and lacustrine depositional environments. The distribution of tight oil in this area is summarized, and favorable areas of tight oil are proposed.