A series of experimental methods were used to characterize the organic geochemistry, mineralogy, and pore structure and to preliminarily evaluate the potential of the coal-bearing shale gas of the Xishanyao Formation in Taibei sag of the Turpan-Hami Basin. The results reveal that more than 50% of the samples have fair to good organic matter (OM) richness with TOC > 1.5%, and the shale samples are dominated by type III kerogen with the relative content of regular C-29 sterane averaging as 0.60, and pristine/phytoene (Pr/Ph) values averaging 3.10. T-max values, biomarker parameters and vitrinite reflectance (R-o) indicate that the OM is mainly at an immature to low mature stage. The dominant mineral composition is clay minerals. Nanometer-scale inorganic matrix pores and fracture pores are developed in the coal-bearing shale, with mean pores diameters ranging from 10.2 to 18.1 nm. Compared with typical marine and lacustrine gas shale, the Xishanyao coal-bearing shale has a fair to good ability to generate low-maturity shale gas, and the clay minerals provide the main adsorption surface for adsorbed gas. The shale with clay minerals content lower than 55% and quartz content higher than 31% can have an appropriate gas adsorption ability and brittleness simultaneously. An analysis of the development conditions of organic rich shale shows that the favorable gas shale is mainly distributed in the margin of the ancient lake basin, which is the preferred target area. Overall, high clay content and deep burial are the main adverse factors for the recent exploration and development of the Xishanyao coal-bearing shale gas.