With the development of natural gas exploration in deep strata, the scale and hydrocarbon-generation potential of the Lower Paleozoic source rocks in Ordos Basin have become an important factor. Based on field outcrop, drilling core and thin section observation, combined with geochemical analysis of minerals, organic carbon, rare earth elements, kerogen, vitrinite reflectance, pyrolysis and so on, the sedimentary model and hydrocarbon-generation potential of Ordovician Ulalik Formation in western basin are studied in detail. The study of sedimentary facies shows that Ulalik Formation is mainly composed of three facies belts, i.e., shallow-water calcareous shelf facies, deep-water shelf facies, and trough facies. The deep-water shelf facies is favorable for the development and preservation of source rocks due to the quiet water body and being under the oxidation interface, however, the trough facies are not conducive to the preservation of source rocks due to the influence of gravity flow and turbidity current. The source rocks of deep-water shelf facies are effective for gas generation: TOC is mostly more than 0.4,, kerogen is mainly type I and a little type Ⅱ1 , and the source rock is generally in the stage of maturity-high maturity. Taking 0.4, as the lower limit of TOC of effective source rock, the total amount of hydrocarbon generated by Ulalik Formation is 8.226 × 108t, which can provide sufficient natural gas for Ordovician reservoirs in the western basin.