Abstract: The tectonic evolution of Xihu Depression can be divided into three phases （rifting, thermal subsidence and regional sagging） by two unconformities formed by Yuquan Movement （Later Eocene） and Longjing Movement （Later Miocene）. The sagging rate and source maturation are different in different structural belts and times. Basin simulation shows the source rocks in Pinghu Group have bigger petroleum generation ability than that of Huagang Group. The article mainly discusses the mechanism of petroleum migration and pool forming of Xihu Depression through the analysis of fluid potential, temperature and pressure system, and abnormal pressure using Basin Mod software.