Abstract: Taking Paleogene of Shengli Oil Field as an example and using statistic method and microscopic data,the analysis of distribution and evolution characteristics of formation water in research area was made, and the mechanism of formation water effects on reservoir properties was studied. It is considered that for a given identical sedimentary basin, the formation water (which is influenced by depositional environment) is the basic factor that affects the reservoir diagenesis, and its spatial distribution affects the evolution of the reservoir physical properties. There exist 4 types of co-relationship between formation water and reservoir physical properties. Through the integrated consideration of formation water salinities, carbonate contents and reservoir properties, the diagenetic environment and evolution of reservoir properties can be estimated.