As an important alternative energy resource, oil shales have a large number of potential applications. In ore, many inorganic mineral impurities can be produced simultaneously during the mining process. Through the physical separation methodology, the impurities can be effectively removed and the concentrate can be enriched. This study analyzed the diffusion process of heavy-medium oil shales and its impact on the separation of the oil shale in a continuous vibrating air dense medium fluidized bed (CVADMFB). The migration characteristics of the dense medium along the transverse (X-axis) and longitudinal (Z-axis) direction were systematically analyzed. The effects of the operating parameters (vibration amplitude and frequency, gas velocity) on the stability of the bed density were studied, and the optimum parameters were determined. Then, the oil shale was separated under the optimal factors. The results showed that in the transverse (positive X-axis) direction, the trajectories of particles migrating from the sidewall to the center of the bed were formed at the feeding end and then gradually spread to the discharge end. Finally, the transversal diffusion process was completed. However, due to the limitations of the particle migration area in the longitudinal diffusion process, the backmixing problem arises during the migration process of the dense medium and it gradually disappears as the beneficiation evolves. Finally, the uniform mixing is completed. In the process of oil shale separation under the optimal process parameters, the rapid-loose zone, the segregation layer zone, and the separation checking zone are formed successively along the longitudinal direction of the bed layer. When the vibration amplitude (A), frequency (f), and the operating gas velocity (Uv) were 2.5 mm, 26 Hz, and 0.152 m/s, respectively, the oil content and the yield of the concentrate were 10.12% and 33.2%. The oil content and the yield of the tailings were 0.71% and 66.8%, respectively. The probable error E was 0.11 g/cm3. The results show that the oil shale can be effectively purified and upgraded by CVADMFB.