The fine siliciclastic rocks of the Early Permian Shoushangou Formation in West Ujimqin Banner, central Inner Mongolia are a hot spot for Late Paleozoic oil and gas exploration and hold key implications for the tectonic evolution during the closure of the Paleo-Asian Ocean (PAO). Therefore, the sedimentary characteristics of the Shoushangou Formation in West Ujimqin Banner, along with the geochemical and Sm–Nd isotopic characteristics of the clastic rock samples in Well MXD1, were investigated to privde additional constraints on its provenance and tectonic background.The mudstones contain large proportions of quartz, feldspars and igneous debris, and the CIAcorr (0.52–0.66), the A–CN–K plot and the lack of Ce anomalies in REE show a weakly weathered provenance and the chemically unaltered parent rocks, suggestive of the proximal deposition and rapid burial. Slip-roll beddings, gravity flow, Bouma sequences and the (trace) fossil assemblages in the profile indicate that the Shoushangou Formation is mainly a shallow- (semi-)abyssal submarine fan and the lithological information indicates the presence of microfaces including main and lesser water supply channels, interchannels, lobes, natural levees. Furthermore, a narrow continental shelf above the submarine fan and the concentrated zircon age population of the Shoushangou formation suggest that the tectonic background is most likely a retroarc basin.The Al2O3/TiO2 ratio (19–24, average 22), the multivariable principal element source identification diagram and the plots of Th/Sc vs. Zr/Sc and Co/Th vs. La/Sc indicate that the source is mainly felsic, with a minor proportion of intermediate rocks. Trace elemental characteristics (e.g., Th, Zr, Sc, Co, Nd, and REE) deomonstrate that the tectonic setting of the Shoushangou Formation is confined by continental arcs.The whole rock Sm–Nd isotopic spectra of the Carboniferous and Permian strata indicate that the Baolidao arc is the main source of central Inner Mongolia. Additionally, the comparison of the Nd model ages and the zircon U–Pb ages of the Baolidao arc and other entities in the Central Asian Orogenic Belt (CAOB) is in support of a prolonged subduction of the PAO since ∼510 Ma, suggesting that the Baolidao arc was developed from the southern continental arc of the original South Mongolia microcontinent. Accordingly, it is suggested that the Shoushangou Formation was deposited in a retro-arc basin which was strongly influenced by the steep subduction of the PAO and the results collectively suggest that the PAO terminated no earlier than the middle to late Permian.