The Lower Cretaceous strata in the Kuqa Basin in Xinjiang are marked by a set of arid red beds. Several types of sedimentary fades can be identified in this set of arid red beds: mudstones of the plaza and intracontinental sebkha, aeolian sandstones, sandy conglomerates of the intermittent river, conglomerates of the pluvial fan, etc. These types of sedimentary facies constitute a typical desert system. Therefore, the Cretaceous strata in the Kuqa Basin provide a favorable condition for studies of sequence stratigraphic divisions of the desert system. With the rise and fall of the base level of the sedimentary basin, cyclicity is clearly revealed in stratigraphic records, which helps the identification of the third-order sequences. Based on the cyclicity in stratigraphic records, 5 third-order sequences can be found in the strata of the Early Cretaceous in the Kuqa Basin. These sequences comprise a second-order tectonic sequence. The primary feature of these third-order sequences is of an upward-fining sedimentary succession formed by a succession of "coarse sediments of the alluvial system-fine sediments of the lake system". The result of this study shows that aeolian sandstones are the best reservoirs of natural gas in the Cretaceous strata in the Kuqa Basin, and that the Kela-2 gas field is the first large gas field dominated by aeolian sandstone reservoirs in China.