The Lower Cambrian Yurtus Formation in Tarim Basin is one of the best marine source rocks found in China. In order to understand the evolution of the sedimentary facies of the Yurtus Formation and its restriction on source rocks, this paper has systematically studied and analyzed the sedimentary evolution of the Yurtus Formation and its restriction on source rocks by combining 9 field profiles and 17 wells. After fine correlation, it is found that Yurtus Formation can be divided into two third-order sequences and five fourth-order sequences, among which the first third-order sequence can be divided into three fourth-order sequences and the second third-order sequence can be divided into two fourth-order sequences. The first third-order sequence occurred in the Early Cambrian, the transgression speed was slow and the influence range was relatively limited, while the transgression of the second third-order sequence was relatively rapid and had a large influence range. The fourth-order sequence sq1 developed in the early stage of the first transgression, with shallow water body, mainly deposited with purple-red dolomite and gray-black sand-clastic dolomite, which mainly played the role of filling and filling; sq2 and sq4 developed during the transition period of transgression and regression, and were two sets of deep-water deposits. The deposits are mainly dark mudstone, siliceous mudstone and siliceous rock, and interbedded mudstone and banded dolomite are developed locally; sq3 and sq5 are shallow water deposits in the process of regression, mainly gray dolomite and algal dolomite, with argillaceous interlayers in some parts. Analysis of deposition environment using Mn, Fe, Ti, Rb, K, Sr, Ba, Cu, U, V, Mo and other elements and their ratios shows that in the period of sq2, the water body is deep, low salinity and warm and humid climate, which is conducive to the development of organisms, and its sulfurized and anoxic environment is extremely conducive to the preservation of organic matter; In the period of sq4, the depth of water body is larger, the salinity is relatively small, and the climate is also relatively warm and humid, so it is also suitable for biological survival. Moreover, it is suitable for the preservation of organic matter in the environment of sulfidation, anoxia and secondary oxidation. High-frequency sea level changes and the evolution of the depositional environment affect the source rock distribution and quality of the Yurtus Formation. The quality of the source rocks deposited at sq2 is better than that of sq4, but its distribution area is less than that of sq4.