Abstract: Z₂dn of Sichuan basin belongs to the last set of Neoproterozoic strata, and it is also the first sedimentary cover for Sichuan. The main lithology is the pure dolomite in light color, which underwent a complicated diagenesis, so its depositional environment is a topic of much controversy. Based on the field section in the periphery of the basin, drilling core, well logging data and analysis of analytical data, guided by petrology, sedimentology and petroleum geology theory, and combined with the modern stromatolites sedimentary characteristics, the authors analyzed characteristics of petrology, sedimentary environment of Dengying Formation. Some conclusions have been reached:① The rocks of Dengying Formation can be divided into 3 types and 12 subtypes. Poor algal section is mainly composed of dolomicrite, clotted dolomite and grained dolostone, mostly occurring at the early-middle stage of a complete sedimentary cycle. Rich alga section is mainly composed of straticulate dolostone, laminated dolomite and foam dolomite, mostly occurring at the middle-late stage of a complete sedimentary cycle. ② The sedimentary facies of Z₂dn of Sichuan basin is mainly shallow-water restricted platform facies, and it can be subdivided into 4 subfacies, i.e., algal mound, grain beach, flat and lagoon. The sedimentary facies of the study area is mainly algal mound, and the algal mound may be further subdivided into base, core, cap 3 microfacies. ③ Comprehensive analysis shows that the high quality reservoirs is obviously controlled by facies. In platform, the reservoirs of grained beach and algal mound, especially the composite body of "mound and beach complex", are of the best physical property, and gas exploration of Z₂dn should be carried out around the microbolite in Sichuan basin.