This study investigates the rare-earth element (REE) geochemistry of twenty-nine clastic rock samples from the Paleogene Liushagang Formation in the Weixi’nan Sag. The primary objectives were to quantitatively evaluate the depositional paleoenvironment, determine the provenance lithology, and constrain the tectonic setting of the source area. Results reveal distinct chondrite-normalized REE distribution patterns characterized by light REE (LREE) enrichment, relatively flat heavy REE (HREE) segments, and pronounced negative Eu anomalies. The cerium anomaly index (Ce_anom, normalized to the North American Shale Composite) ranges from −0.06 to 0.00, implying broadly suboxic to anoxic-reducing conditions in the water column during deposition. The chondrite-normalized (La/Yb)_N ratio, utilized as a proxy for relative depositional residence time, decreases stratigraphically from member 3 to member 1, reflecting a transition to shorter residence times and higher relative sedimentation rates. Laterally, (La/Yb)_N increases toward the basin center, accurately recording progressively lower sedimentation rates basinward. Provenance analysis indicates that the sediments were predominantly derived from felsic igneous rocks of the upper continental crust. Spatially, the northern steep-slope belt reflects a uniform source, whereas the southern gentle-slope belt and the Weixi’nan low-uplift periphery record multisource mixed inputs. Finally, tectonic discrimination reveals an “active continental margin” affinity. This geochemical signature represents the inherited tectonic environment of the Mesozoic parent rocks in the surrounding source uplifts, rather than the Cenozoic extensional rift setting of the Weixi’nan Sag itself.