Shale gas is one of the most promising unconventional resources both in China and abroad. It is known as a form of self-contained source-reservoir system with large and continuous dimensions. Through years of considerable exploration efforts, China has identified three large shale gas fields in the Fuling, Changning and Weiyuan areas of the Sichuan Basin, and has announced more than 540 billion m3 of proven shale gas reserves in marine shale systems. The geological theories for shale gas development have progressed rapidly in China as well. For example, the new depositional patterns have been introduced for deciphering the paleogeography and sedimentary systems of the Wufeng shale and Longmaxi shale in the Sichuan Basin. The shale gas storage mechanism has been widely accepted as differing from conventional natural gas in that it is adsorbed on organic matter or a mineral surface or occurs as free gas trapped in pores and fractures of the shale. Significant advances in the techniques of microstructural characterization have provided new insights on how gas molecules are stored in micro- and nano-scale porous shales. Furthermore, newly-developed concepts and practices in the petroleum industry, such as hydraulic fracturing, microseismic monitoring and multiwell horizontal drilling, have made the production of this unevenly distributed but promising unconventional natural gas a reality. China has 10–36 trillion m3 of promising shale gas among the world’s whole predicted technically recoverable reserves of 206.6 trillion m3. China is on the way to achieving its goal of an annual yield of 30–50 billion m3 by launching more trials within shale gas projects.