Investigations have revealed that basic and alkaline volcanic rocks are distributed in major source rocks within all the faulted basins in China. There are three types of assemblages of volcanic rocks and source rocks: basalt - dark-colored shale, basalt-evaporite-dark-colored shale and andesite-coal-dark-colored shale. The authors suggest that the environment in which subaqueous volcanoes erupt during the deposition of the source rocks is also very good for accumulation of high-quality source rocks. Fluids (including hydrogen and so on) , heavy-metal minerals and heat provide the volcanic activity may promote organic matter in the source rocks to transform easily to hydrocarbon at shallow burial depths and low temperatures by means of heating, introduction of hydrogen and catalysis of the minerals. Such hydrocarbon is called hydrocarbon generated by mixed organic and inorganic actions. The application of this theory to petroleum exploration will yield new finds.