The upper member of the Xiaganchaigou Formation in the Yingxi Area of the Southwestern Qaidam Basin is a set of evaporite-bearing lacustrine series. In this study, petrographic analyses of rock thin sections, cores, drillings, logging as well as geochemistry were used to study the characteristics of the sedimentary cycles of the series. Concurrently, this study adopts a transgressive–regressive (T–R) cycle sequence theory, based on lithology, logging curves, the stacking pattern of the subsequences, and unconformity and seismic reflection terminal relations. This approach uses evaporites as the primary marker layer for identifying the initial lake flood surface and dividing the sequence of the evaporite-bearing series in the upper member of the Xiaganchaigou Formation. Results show a zonal distribution of evaporites transitioning laterally from the center to the margin of the basin to mixed carbonate rocks and then to clastic rocks. Vertically, there are two third-order sedimentary cycles and six fourth-order sedimentary cycles. Five types of evaporite lithofacies combinations were identified. Evaporites were formed by evaporative crystallization at a particular depth beneath lake water during a lacustrine regression during an arid paleo-climate and rapid subsidence of the basin basement. It has been established based on the asymmetric sedimentary cycle development model that during the lacustrine transgression stage, the mixed carbonate rocks were transformed into mudstone upward, and during the lacustrine regression stage, the mixed carbonate rocks transformed into gypsum rocks, glauberite, and halite, upward, while a delta and reef flat limestones developed at the edge of the basin. There is a one-to-one correspondence between the T–R cycle sequence division and the sedimentary cycle division.