Abstract: The Permian Longtan Formation in the Lower Yangtze area contains not only important source rocks, but also high quality reservoirs, in addition to coal seams in some places. Based on the comparison of the depositional features and sedimentary sequences of the Formation between the land and sea areas, it reveals that the sequence starts with carbonate rock and gradually becomes clastic dominated deposits when coal-bearing strata expands from the land to the sea. Coal seams are mainly distributed in the middle and upper parts of the Longtan Formation. In the land area, there is always a covering limestone on the top of the coal, but it is missing in the marine area. The organic matters in the source rocks of the Longtan Formation are quite high (TOC:2-4%). The source rocks are quite thick (200-600m), and good for oil generation (Ro:0.5-2%) on land. However, the Permian source rocks around the coastal rifts next to the Laoshan uplift are restricted. Thus, we speculate that the Permian source rocks around the Laoshan uplift of the South Yellow Sea Basin is not very potential.