The accumulation and productivity of shale gas are mainly controlled by the characteristics of shale reservoirs; study of these characteristics forms the basis for the shale gas exploitation of the Lower Cambrian Niutitang Formation (Fm), Southern China. In this study, core observation and lithology study were conducted along with X-ray diffraction (XRD) and electronic scanning microscopy (SEM) examinations and liquid nitrogen (N2) adsorption/desorption and CH4 isothermal adsorption experiments for several exploration wells in northwestern Hunan Province, China. The results show that one or two intervals with high-quality source rocks (TOC>2 wt%) were deposited in the deep-shelf facies. The source rocks, which were mainly composed of carbonaceous shales and siliceous shales, had high quartz contents (＞40 wt%) and low clay mineral (<30 wt%, mainly illites) and carbonate mineral (<20 wt%) contents. The SEM observations and liquid nitrogen (N2) adsorption/desorption experiments showed that the shale is tight, and nanoscale pores and microscale fractures are well developed. BJH volume (VBJH) of shale ranged from 2.144×10?3 to 20.07×10?3 cm3/g, with an average of 11.752×10?3 cm3/g. Pores mainly consisted of opened and interconnected mesopores (2–50 nm in diameter) or macropores (>50 nm in diameter). The shale reservoir has strong adsorption capacity for CH4. The Langmuir volume (VL) varied from 1.63 to 7.39 cm3/g, with an average of 3.95 cm3/g. The characteristics of shale reservoir are controlled by several factors: (1) A deep muddy continental shelf is the most favorable environment for the development of shale reservoirs, which is controlled by the development of basic materials. (2) The storage capacity of the shale reservoir is positively related to the TOC contents and plastic minerals and negatively related to cement minerals. (3) High maturity or overmaturity leads to the growth of organic pores and microfractures, thereby improving the reservoir storage capacity. It can be deduced that the high percentage of residual gas in Niutitang Fm results from the strong reservoir storage capacity of adsorbed gas. Two layers of sweet spots with strong storage capacity of free gas, and they are characterized by the relatively high TOC contents ranging from 4 wt% to 8 wt%.