No substantial breakthroughs have been made in hydrocarbon exploration of the South Yellow Sea Basin. It is believed that the Mesozoic–Paleozoic marine sedimentary formation in the South Yellow Sea Basin is similar to that in the Sichuan Basin. Therefore, outcrop, drilling, and seismic data were determined and compared with the research results on petroleum geological conditions in the Yangtze land area, and the hydrocarbon geological conditions were analyzed comprehensively from multiple aspects, such as basin evolution and main source rocks, reservoir characteristics, preservation conditions, and structural traps. The results show that two main stages in the South Yellow Sea Basin (the stable evolution stage of the Mesozoic–Paleozoic marine basin and the Mesozoic–Cenozoic tectonic reformation and basin formation stage) were important for the development and evolution of four sets of main source rocks. Reservoirs dominated by carbonate rocks, three sets of capping beds with good sealing capability, relatively weak magmatic activity, and multiple types of structural traps jointly constituted relatively good hydrocarbon-reservoir-forming conditions. There were four sets of main source-reservoir-cap assemblages and three possible hydrocarbon reservoir types (primary residual-type hydrocarbon reservoir, shallow reformed-type hydrocarbon reservoir, and composite-type hydrocarbon reservoir) developed in the marine strata. It is concluded that the marine strata in the South Yellow Sea Basin have relatively good hydrocarbon potential. The Laoshan Uplift is characterized by stable structure, complete preserved source reservoir cap assemblage, and large structural traps, and thus it is the preferred prospect zone for marine Paleozoic hydrocarbon exploration in this area.