The Junggar Basin, where twenty-seven oil fields and five gas fields have been discovered, is a typical “oil basin” with proven ratio of natural gas of 5.3%. The amount of natural gas from Permian source rocks has been found in the western margin of the basin, but no large-scale natural gas reservoir has been discovered. The key to natural gas exploration is whether Permian oil-prone source rocks have large gas generation potential. Based on the comprehensive analysis of geochemical features and hydrocarbon generation simulation experiments, it is proved that the gas generation intensity could meet the standard of medium to large gas-fields (20 × 108 m3/km2) at a depth of more than 6500 m. In the Penyijing and Shawan Sags, the burial depth of the Fengcheng Formation source rocks is between 8500 m and 10,000 m, respectively. It could be concluded that the Permian source rocks in the Penyijingxi and Shawan Sags have relative higher gas generation potential. In addition to high natural gas generation potential, two sets of effective reservoirs (wreathing volcanic rocks and secondary dissolution of sandy conglomerates) and thick caprocks with overpressure are developed in the most areas of Junggar Basin. Recently, natural gas reservoirs have been discovered and industrial natural gas had been obtained around the Penyijingxi Sag, Shawan Sags, and the Southern margin of the Junggar Basin. Our research results and natural gas exploration practice show that the Junggar Basin have relatively large natural gas exploration potential.