Abstract: To investigate the contamination, source, and ecological risk of soil heavy metals in a typical industrial town in Shandong Province, China, this study collected 499 topsoil samples from the study area from August to October 2022. The contents and spatial distributions of heavy metals like Hg, Cd, As, Pb, Cu, Cr, Zn, and Ni in the samples were analyzed using classical statistics and spatial interpolation methods. The source apportionment of heavy metals in the study area was explored through the principal component analysis (PCA). The contamination levels of heavy metals in the study area were assessed using the contamination index method. The results indicate that the average contents of Hg, Cd, As, and Pb in soils all exceeded their background values in Yantai City, and high-value zones were observed for all eight elements, indicating various degrees of enrichment. The analysis of coefficients of variation reveals that except for Ni, other heavy metals were significantly influenced by human activities. The PCA suggests that Cd, Pb, Cu, Zn, and Cr originated primarily from industrial and traffic sources. As and Hg were predominantly derived from industrial, agricultural, and domestic sources, while Ni was primarily from natural soil parent materials. The analyses based on the single-factor contamination index, geoaccumulation index, and Nemerow contamination index show that apart from Hg and Cd, other soil heavy metals in the study area exhibited no or slight contamination overall, demonstrating that the study area was principally contaminated by Hg and Cd. The potential ecological risk assessment suggests that the overall heavy metal contamination posed a minor risk level. A few sites with relatively severe contamination were primarily located around the industrial area. The waste gas, wastewater, and industrial residue generated by industrial activities constituted the dominant factor influencing the enrichment of heavy metals in surrounding soils. Overall, soil heavy metal contamination in the study area was at a moderate to low level, with some metals, particularly Hg and Cd, severely exceeding standard levels, warranting attention. It is recommended to strengthen the monitoring of heavy metals in soils around the industrial area, and adopt scientific and reasonable measures to ensure sustainable soil utilization.