Samples collected from 20 geographically widespread wells in the sparsely drilled Palo Duro Basin were analyzed for total organic carbon content (TOC). Highest values of TOC, up to 6.9%, occur in Upper Permian San Andres dolomite in the southern part of the basin. Pennsylvanian and Lower Permian (Wolfcampian) basinal shales contain up to 2.4% TOC and are fair to very good source rocks. Kerogen color and vitrinite reflectance, which indicate maximum paleotemperatures, were analyzed in all samples containing greater than 0.5% TOC. Pennsylvanian and Wolfcampian kerogen is yellow orange to orange, an indication that temperatures were sufficiently high to begin to generate hydrocarbons from lipid-rich organic material. Palo Duro Basin samples have a broad range of vitrinite reflectance values, but populations with the lowest reflectance probably indicate the true temperatures that were reached in the basin. Average reflectance in representative Pennsylvanian vitrinite is 0.52%; in Wolfcampian samples the average reflectance is 0.48%. These values are consistent with kerogen color and suggest that basinal source rocks may have begun to generate hydrocarbons.