Heavy oil is commonly distributed in the Erlian Basin, North China. It can be divided into two genetic types: the primary and the secondary. Primary heavy oil is generated directly by Cretaceous immature or low-mature hydrocarbon sources, or is derived from differentiation of crude oil during migration. Oil of this type has viscosity vagrees, is resultant from a combination of biodegradation, water-leaching and oxidation of primary heavy oil. Based upon a large number of determinations on the physical properties of crude oil, GC analyses of saturated and aromatic hydrocarbons, and GC-MS analyses of steranes and terpanes, the characteristics of heavy oil of various types have been described. Differences in inspissation degree have made it possible the grouping of heavy oil of the Erlian Basin inspissation, the products vary from common heavy to over-heavy oil. Slope and uplifted areas inside a reservoir basin are most favorable to the inspissation and formation of heavy oil. Interaction of several mechanisms of inspissation has resulted in a widespread distribution of heavy oil within the Erlian Basin.