The recently discovered Kemozibayi mafic-ultramafic intrusion and its associated magmatic Cu-Ni sulfide deposits are located at the southern margin of the Chinese Altai Mountain, Central Asian Orogenic Belt in north Xinjiang, NW China. The intrusion is composed of olivine websterite, norite, gabbro and diorite. Disseminated and net-textured Ni-Cu sulfide ores are hosted in the center of the gabbro. In this work, new zircon U-Pb ages, Hf-O isotopic and sulfide S isotopic data, and whole rock and mineral chemical analyses are combined in order to elucidate the characteristics of the mantle source, nature of subduction processes, degree of crustal contamination, geodynamic setting of bimodal magmatism in the region, and the metallogenic potential of economic Cu-Ni sulfide deposit at depth. SIMS zircon U-Pb dating of the gabbro yields Permian ages (278.3±1.9Ma), coeval with the Kalatongke Cu-Ni deposit and with Cu-Ni deposits in the Eastern Tianshan and Beishan areas. Several lines of evidence (positive εHf(t) from +7.1 to +13.3, Al2O3, TiO2 and SiO2 contents in clinopyroxene from olivine websterite, high whole rock TiO2 contents) suggest that the primary magma of the Kemozibayi intrusion was a calc-alkaline basaltic magma derived from depleted mantle, and that the degree of partial melting in the magma source was high. The evolution of the Kemozibayi mafic-ultramafic complex was strongly controlled by fractional crystallization and the crystallization sequence was olivine websterite, norite, and then gabbro. This is evidenced by whole rock Fe2O3 contents that are positively correlated with MgO and negatively correlated with Al2O3, CaO and Na2O, similar LREE enrichment and negative Nb, Ta, Hf anomalies in chondrite and primitive mantle-normalized patterns, and a decrease in total REE and trace elements contents and magnetite content from gabbro through to norite and olivine websterite. Varied and low εHf(t) (+7.1 to +13.3) and high δ18O values (+6.4‰ to +7.2‰) in zircon, high La/Ba, and Rb/Y ratios, and low Nb/La ratios in whole rock samples, suggest 5–10% contamination by subduction related fluid and 10–15% contribution from an upper crustal component. The clinopyroxene TiO2 and Alz values (percentage of tetrahedral sites occupied by Al) in the Kemozibayi intrusion show characteristics of rift cumulate rocks, but minor arc cumulate features, indicating that the mantle source might have experienced a lower degree of subduction metasomatism. A high degree of partial melting of the depleted mantle and subducted oceanic sediments with related fluid metasomatism and crustal contamination in the Kemozibayi mafic-ultramafic intrusion are appropriate for the formation of an economic copper and nickel sulfide deposit. Crustal contamination, crustal S addition and early fractionation of olivine and sulfide induced S saturation and the formation of immiscible sulfide in the Kemozibayi intrusion. With no obvious olivine and Ni-rich sulfide co-crystallization, the Cu grade in the present orebody is higher than the Ni grade, and the proportion of mafic rocks is high in the Kemozibayi mafic-ultramafic complex. Cumulatively, these features suggest that the mafic-ultramafic intrusion underwent early olivine and Ni sulfide segregation, and that deeper or extended portions of the present intrusive body may host Ni mineralization.