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The vast majority of discovered oils in the Bohai offshore area have undergone biodegradation ranging from 1 to 9 on the PM scale (a scale to rank the level of biodegradation, proposed by Peters and Moldowan, 1993). The extent of distribution and biodegradation of all discovered oils in the Bohai offshore area was investigated systematically using geologic and geochemical data to reveal controlling factors of varying levels of biodegraded oils. Based on the analysis of the environment and material significances and the resistance to degradation of biomarkers, the biomarker parameter assemblage that is suitable for the oil-source correlation of severely biodegraded oils (higher than PM 6) in the Bohai offshore area was determined. The spatial distribution and biodegradation extent are mainly controlled by the current burial depth, the duration of biodegradation, the area of the oil–water contact (OWC), and a late strike-slip movement of the Tanlu fault. Almost all biodegraded oils are found in shallow reservoirs above 2000 m (6562 ft). The longer the oils are present in these reservoirs or the larger the area of the OWC the reservoirs show, the greater the extent of biodegradation will be. The late, strong strike-slip movement of the Tanlu fault may have significantly enhanced the biodegradation extent of several oils in fields located in the Tanlu fault zone by introducing oxygenated freshwater from the surface or near surface and creating a more suitable environment for biodegradation. The C19 tricyclic terpane/C23 tricyclic terpane, C24 tetracyclic/C26 tricyclic terpane, and gammacerane/C24 Tetracyclic do not seem to be influenced by biodegradation and show obvious differences between the three different source-rock intervals. Such a biomarker parameter assemblage can be used successfully to determine the origin of severely biodegraded oils (higher than PM 6) by correlating with extracts of possible source rocks in the Bohai offshore area.