The Dongying depression in the Bohai Bay Basin is a young, prolific oil-producing basin in China. The gray to black mudstones, calcareous mudstones, and oil shales of the Eocene Shahejie Formation (Es3 and Es4) are the major source rocks that are primarily dominated by type I kerogens with a high total organic carbon of up to 18.6%. The Es3 interval is characterized by a sedimentation rate of up to 500 m/m.y. Widespread overpressures are present in the Eocene Es3 and Es4 intervals in the depression, with pressure coefficients up to 1.99 from drillstem tests. Among the sonic, resistivity, and density logs, only the sonic-log displays an obvious response to the overpressure from which the top of the overpressure can be clearly identified. Acoustic traveltime versus effective vertical stress analysis of more than 300 wells in the Dongying depression suggests that the acoustic traveltime of the normally pressured and overpressured mudstones is reduced with increasing vertical effective stress. Pore pressures are accurately predicted in the Dongying depression using an Eaton (1972) exponent of 2.0 by comparing the predicted pressure coefficients with measured pressure coefficients. Disequilibrium compaction has been previously proposed as the sole cause of the high-magnitude overpressures in the Eocene strata of the Dongying depression because of rapid deposition of fine-grained sediments. However, our data indicate that the overpressures are caused by oil generation from the source rocks within the Es3 and Es4 intervals. The overpressured sediments display a normal compaction as evidenced from the overpressured mudstones exhibiting no anomalously low density, the apparent lack of correlation between mudstone densities and effective vertical stress, and the overpressured reservoir sandstones showing no anomalous high-matrix porosities or anomalous geothermal gradient. The depths to the top of the overpressure intervals range from 2000 to 3000 m (6562-9843 ft) following closely source rock depths. All the overpressured reservoirs and source rocks have a minimum temperature of approximately 87 degrees C, and overpressured source rocks generally have vitrinite reflectance (R-o) values of 0.6% or higher. Overpressures are not found in the strata within which the R-o values are less than 0.5%. The overpressured reservoirs in the Es3 and Es4 intervals are predominantly oil saturated or oil bearing. Organic-rich source rocks with overpressures are capable of generating hydrocarbons and thus can maintain an abnormally high pressure. The calcite precipitation in the calcareous mudstones may have caused a significant reduction in porosity and permeability to form an effective pressure seal. The presence of widespread microfractures in the source rocks may relate to episodic expulsion of hydrocarbons or overpressure dissipation. Overpressures in the reservoir rocks are generated by the fluid transmission from the overpressured source rocks through active faulting and fracturing.