The tectonic setting of the northern Tarim Craton during the Palaeozoic is vital to our understanding of the subduction polarity of the paleo‐oceanic plates in the Tianshan Orogen and the accretion history of the south‐western Central Asian Orogenic Belt. We first identified granitoids intruding the Palaeoproterozoic metamorphic rocks in the Kurchu area in the northern Tarim Craton. The zircon LA‐ICP‐MS U–Pb dating of this rock indicates that its crystallization age is 418 Ma, highlighting a late Early Palaeozoic magmatic event. Compared with the contemporaneous granitoids in the southern margin of the Tarim Craton, the Kurchu granitoid has high K2O (6.17–7.25 wt.%) and high alkaline (Na2O + K2O = 9.48–10.56 wt.%) contents. The Rittmann index (σ) ranges from 3.53 to 5.68, and samples plot in the shoshonite series in the K2O–SiO2 diagram, indicating that the rock is a potassic‐alkaline granite (PAG). In addition, this granitoid shows high REE concentrations (264–817 ppm) with significant Eu anomalies and is depleted in Ba, Sr, Nb, Ta, Ti, and P but enriched in Zr and Hf. These geochemical characteristics and high (87Sr/86Sr)i (0.70857–0.70995) and low εNd(T) (−10.67 to −10.24) values of the Kurchu PAG indicate that this rock was derived from the partial melting of the crust. The diagenetic conditions of the Kurchu PAG are high temperatures, as recorded by higher zircon saturation temperatures (855–919°C), low diagenetic pressure, a less shallow emplacement depth recorded by lower Sr (<200 ppm) concentrations, and a low oxygen fugacity recorded by lower Eu* (0.17–0.89), higher Zr (>355 ppm) and Hf (>9.73 ppm) concentrations, and trace element contents of zircons. In various discrimination diagrams, all samples consistently plot in rift‐related areas. These geochemical and diagenetic features suggest that this magmatic event probably occurred in a back‐arc environment. Therefore, there is back‐arc basin occurring in the northern Tarim Craton in the Early Palaeozoic, which provides strong evidence that this region was an active margin probably much earlier than Silurian, necessitating the southward subduction of the South Tianshan Ocean.