The Lower-Middle Miocene Kucukkuyu Formation crops out extensively in the Edremit Gulf area (NW Turkey). In this study, shale samples from this unit were investigated to evaluate source rock characteristics, depositional conditions, and hydrocarbon potential. Outcrop samples of the Kucukkuyu Formation were taken from different locations and analyzed by Rock-Eval pyrolysis, vitrinite reflectance (Ro), stable carbon isotope (δ13C), total sulfur (TS), gas chromatography (GC), and gas chromatography-mass spectrometry (GC-MS). The total organic carbon (TOC) values range from 0.23 to 6.1 wt.% with an average of 1.76 wt.% for the northern samples and 0.24 to 2.82 wt.% with an average of 1.66 wt.% for the southern samples around the Edremit Gulf. Hydrogen index (HI) values were up to 606 and 712 mg HC/g TOC in the north and south of the gulf, respectively. Organic matter type in the formation consists predominantly of Type II and III kerogen with a minor component of Type I kerogen. Tmax values ranging from 414 to 496 $^{\circ}$C in the north and 423 to 446 $^{\circ}$C in the south of the gulf indicate that most samples are at the beginning of the oil generation window and are thermally immature or early-mid-mature. Vitrinite reflectance (Ro) and biomarker maturity parameters support this result. Based on geological observations, biomarker distributions, and TOC/TS ratios, the Kucukkuyu Formation was deposited in a freshwater to slightly brackish water environment under anoxic-suboxic conditions with organic matter input from aquatic organisms and from terrestrial higher plants. According to Rock-Eval pyrolysis data, the Kucukkuyu Formation mostly has medium to good hydrocarbon-generation potential. However, as these potential source rocks are in general immature and/or early-mature, the hydrocarbon potential of the study area is very limited.