The upper part of Madbi Formation organic-rich shale is considered an important regional source rock in the Masila Basin, Yemen. Ten cutting samples from this Upper Jurassic organic-rich shale were collected from wells drilled in the Kharir Oilfield, Masila Basin in order to geochemically assess the type of organic matter, thermal maturity and depositional environment conditions. Results reveal that Upper Jurassic organic-rich shale samples contain high organic matter more than 2.0 wt.% TOC and have very good to excellent hydrocarbon potential. Marine algae organic matter is the main source input for the Upper Jurassic shale sequence studied. This has been identified from organic petrographic characteristics and from the n-alkane distributions, which dominated by n-C-14-n-C-20 alkanes. This is supported by the high value of the biomarker sterane/hopane ratio that approaches unity, as well as the relatively high C-27 sterane concentrations. A mainly suboxic depositional environment is inferred from pr/ph ratios (1.75-2.38). This is further supported by relatively high homohopane value, which is dominated by low carbon numbers and decrease towards the C-35 homohopane. The concentrations of C-35 homohopane are very low. The depositional environment conditions are confirmed by some petrographic characteristics (e.g. palynofacies). Detailed palynofacies analysis of Madbi shales shows that the Madbi shale formation is characterised by a mix of amorphous organic matter, dinoflagellates cysts and phytoclasts, representing a suboxic, open marine setting. The Upper Jurassic marine shale sequence in the Masila Basin is thermally mature for hydrocarbon generation as indicated by biomarker thermal maturity parameters. The 22 S/22 S + 22R C-32 homohopane has reached equilibrium, with values range from 0.58 to 0.62 which suggest that the Upper Jurassic shales are thermally mature and that the oil window has been reached. 20 S/(20 S + 20R) and beta beta/(beta beta + I +/- I +/-) C-29 sterane ratios suggest a similar interpretation, as do the moretane/hopane ratio. This is supported by vitrinite reflectance data ranging from 0.74% to 0.90%Ro and thermal alteration of pollen and spore. The thermal alteration index value is around 2.6-3.0, corresponding to a palaeotemperature range of 60-120A degrees C. These are the optimum oil-generating strata. On the basis of this study, the Madbi source rock was deposited under suboxic conditions in an open marine environment and this source rock is still within the oil window maturity range.