With six wells currently producing > 5 tons of oil per day, the organic-rich Chang-7 shale of the Triassic Yanchang Formation in the central Ordos Basin, China, has shown great potential to be a significant shale oil/gas play. To provide (a) theoretical and practical basis for further exploration and development activities in this play and (b) guidance for exploitation of other play of similar type, it is critical to understand what the main controlling factors are for the enrichment of organic matter in the Chang-7 shale and under what environmental and climatic conditions was the organic-rich shale deposited and preserved. To tackle these questions, a series of comprehensive lithological, organic geochemical and elements analyses was carried out in this study. The Chang-7³ shale has a thickness of 2–10 m and consists of primarily massive to laminated shales with occasional thin-bedded silty sandstone layers, which were deposited in a shallow to semi-deep lake environment. It has an average TOC of ~ 4%, the majority of which is Types II₁ and II₂ kerogen, indicating a mixed origin. The shale is currently in a moderate thermal evolutionary stage with average S₁ of 3.55 mg/g, S₂ of 8.54 mg/g and HI of 285.02 mg/g, representing a moderate- to high-quality source rock. Element data indicated that the shale was developed in a freshwater column that had dysoxic to anoxic conditions under a generally warm and humid climate setting. Organic matter in the shale had a mixed source including in situ production and terrestrial input from rivers, which were almost of the same importance in contributing to the enrichment of organic matter.