Abstract: Based on the technology of balanced cross-section and physical simulation experiments associated with natural gas geochemical characteristic analyses, core and thin section observations, it has been proven that the Puguang gas reservoir has experienced two periods of diagenesis and restructuring since the Late Indo-Chinese epoch. One is the fluid transfer controlled by the tectonic movement and the other is geochemical reconstruction controlled by thermochemical sulfate reduction (TSR). The middle Yanshan epoch was the main period that the Puguang gas reservoir experienced the geochemical reaction of TSR. TSR can recreate the fluid in the gas reservoir, which makes the gas drying index higher and carbon isotope heavier because C2+ (ethane and heavy hydrocarbon) and 12C (carbon 12 isotope) is first consumed relative to CH4 and 13C? (carbon 13 isotope). However, the reciprocity between fluid regarding TSR (hydrocarbon, sulfureted hydrogen (H2S)?, and water) and reservoir rock results in reservoir rock erosion and anhydrite alteration, which increases porosity in reservoir, thereby improving the petrophysical properties. Superimposed by later tectonic movement, the fluid in Puguang reservoir has twice experienced adjustment, one in the late Yanshan epoch to the early Himalayan epoch and the other time in late Himalayan epoch, after which Puguang gas reservoir is finally developed.