Abstract: In the Shwebo Sub-basin, reservoir has remained the key factor influencing exploration effectiveness for many years. The main rock types of the Cretaceous-Eocene reservoirs are dominated by sand stones, such as feldspar sandstone, quartz sandstone and tuffaceous sandstone with residual intergranular pore and dissolved microfracture pore characterized by complex structure and great heterogeneity. They are low in porosity and permeability, and the quality of reservoirs is determined by their depositional environment and diagenesis. The former includes the depositional system, volcanic activity and provenance, while the latter involves cementation, alteration and compaction. In the island arc in the west of the basin, volcanism and diagenesis are the key factors, while in the internal part of the basin, cementation and compaction dominate. Upon the study of reservoir characteristics, favorable exploration areas are further discussed.