Abstract: With the new breakthrough in oil & gas exploration in deep strata of Xihu Sag in the East China Sea, Xihu Sag has become the key area for offshore petroleum geological study. Based on the latest 2D and 3D seismic data interpretation result, a comprehensive analysis has been conducted on the structural framework of prototype Cenozoic basin in Xihu Sag, the sedimentary framework, fault and evolution characteristics during the period of faulting depression, depression, and regional subsidence. The study indicated that the prototype basin during the Palaeocene and Middle-Lower Eocene Baoshi Age was characterized by development of several faulted sags in Xihu Sag, while during the sedimentation of Upper and Middle Pinghu formation within Eocene, conversion epicontinental depression was developed, reflecting the important stage of the basin evolution from the unstable subsidence of multiple fault sags to stable unified depression. Early echelon bulges developed in the central anticline belt, the structural inversion occurred caused by extrusion strike-slip at the end of the Miocene, forming the large thrust anticline belt in the center of depression, which is favorable exploration tectonic zone forming large gas fields in Xihu Sag.