The ion-adsorption-type rare earth element (iREE) deposits dominantly supply global resources of the heavy rare earth elements (HREEs), which have a critical role in a variety of advanced technological applications. The initial enrichment of REEs in the parent granites controls the formation of iREE deposits. Many Mesozoic and Cenozoic granites are associated with iREE mineralization in the Tengchong block, Southwest China. However, it is unclear how vital the mineralogical and geochemical characteristics of these granites are to the formation of iREE mineralization. We conducted geochronology, geochemistry, and Hf isotope analyses of the Yingpanshan–Damanbie granitoids associated with the iREE deposit in the Tengchong block with the aims to discuss their petrogenesis and illustrate the process of the initial REE enrichment in the granites. The results showed that the Yingpanshan–Damanbie pluton consists of syenogranite and monzogranite, containing REE-bearing accessory minerals such as monazite, xenotime, apatite, zircon, allanite, and titanite, with a high REE concentration (210–626 ppm, mean value is 402 ppm). The parent granites have Zr + Nb + Ce + Y (333–747 ppm) contents and a high FeOT/MgO ratio (5.89–11.4), and are enriched in Th (mean value of 43.6 ppm), U (mean value of 4.57 ppm), Zr (mean value of 305 ppm), Hf (mean value of 7.94 ppm), Rb (mean value of 198 ppm), K (mean value of 48,902 ppm), and have depletions of Sr (mean value of 188 ppm), Ba (mean value of 699 ppm), P (mean value of 586 ppm), Ti (mean value of 2757 ppm). The granites plot in the A-type area in FeOT/MgO vs. Zr + Nb + Ce + Y and Zr vs. 10,000 Ga/Al diagrams, suggesting that they are A2-type granites. These granites are believed to have formed through the partial melting of amphibolites at a post-collisional extension setting when the Tethys Ocean closed. REE-bearing minerals (e.g., apatite, titanite, allanite, and fluorite) and rock-forming minerals (e.g., potassium feldspar, plagioclase, biotite, muscovite) supply rare earth elements in weathering regolith for the Yingpanshan–Damanbie iREE deposit.