Abstract: In order to reveal the preservation potential of Meso-Paleozoic hydrocarbon reservoirs in the South Yellow Sea Basin, tectonic evolution and source-reservoir-cap assembles of the Lower Yangtze are analyzed and compared with the Upper. The results show that Indosinian and Yanshan Movements are much stronger in the South Yellow Sea Basin of the Lower Yangtze than those in the Sichuan Basin of the Upper Yangtze, which leads to partially missing of the Middle-Lower Triassic in the South Yellow Sea Basin. The Meso-Paleozoic caprocks in the South Yellow Sea Basin are mainly mudstone with little gypsum, including the mudstone caprocks of Lower Cambrian, Lower Silurian and Upper Permian and the gypsum caprocks of Lower Triassic in the Yantai Depression and on the Laoshan Uplift. And gas fields of the Weiyuan-type are possible to be discovered. The Upper Permian mudstone may be the direct caprocks and the Middle-Lower Triassic gypsum the indirect caprocks in the Qingdao Depression and Wunansha Uplift, and the gas fields of Wubaiti-type or Jiannan-type could be discovered there. Although the indirect caprocks are lack in South Yellow Sea Basin, hydrocarbon generation and preservation potentials of Lower Paleozoic are both good for oil accumulation. Therefore, exploration and development of Lower Paleozoic shale gas should not be ignored in the South Yellow Sea Basin.