Major oil reserves in rift basins in eastern China are correlated with high quality source rocks. The high quality source rocks and their hydrocarbon generation are often related to volcanic activity in the basins. Three kinds of volcanic rocks in source rocks have been defined in the Songliao, Bohaiwan and North Jiangsu basins. Some of the volcanic rocks were formed in lacustrine environments during the deposition of source rocks. It is remarkable that a part of volcanic-derived materials serves as a source of nutrients for lacustrine organisms which resulted in the formation of the organic matter in source rocks with high organic carbon contents. Besides hydrothermal alteration, the volcanic minerals contributed catalysis and hydrogen to thermal degradation of organic matter into hydrocarbons during burial and diagenesis of source rocks and volcanics. A series of thermal simulations are performed with various combinations of immature source rocks and natural mineral assemblages. Results indicate that a significant volume of hydrogen was produced from the source rock mixed with olivine and zeolite; moreover, this combination provided a 3-fold increase in hydrocarbons. It is proposed that catalysis and hydrogenation by the volcanic minerals promote hydrocarbon generation, although organic matter type is significant variables. Hydrocarbons are generated at a lower degree of thermal stress when the reaction mixture contains volcanic minerals, plus have a heavier carbon isotopic composition, compared to the control set of experiments.