Two sequences can be identified in the sedimentary strata of the lower Tertiary ShahejieFormation in the Zhanhua hollow. The lowstand, lake-transgressive and highstand systemstracts were formed under the control of ancient structure, palaeotopography, palaeoclimate, sed-iment supply, marine-transgression, and so on. In the paper the authors present a composite se-quence stratigraphical section of the Shahejie Formation in this area, and expound the bounda-ries of parasequences, parasequences set and systems tracts and evolutions of lake sequencestratigraphy and sedimentology and discuss various factors controlling the lake level fluctuation.The differences between lake and marine sequence stratigraphy are also indicated in the paper.The lake sequence stratigraphical study should be based on a synthetic analysis of structural evo-lution, palaeomagnetism, palaeoclimatic changes, geological Well logs, seismic and logging data,palaeontological data, global sea level changes, and so on. The sequence stratigraphical evolutionis closely related to the formation, development and elimination of the whole basin and thesedimentary process.