Abstract: Numerical simulation has been carried out for the concrete characteristics of fault block oil reservoirs in Xianhe oilfield to analyze the sensitivity of waterflooding development factors including dip angle, liquid production rate, permeability and heterogeneousity. By applying its conclusions to guiding the adjustment in extra high water cut period of Tong 61 fault block, many hydrodynamic adjustment measures have been performed successfully. These measures include the increase in liquid production rate, the change in water injection direction, etc. After field practice, the effect of waterflooding development was improved obviously. Average oil-production rate increased by 132t/d, water-cut raising rate decreased from 0.6% to 0, natural decline rate decreased from 16.7% to 13.2%, recoverable reserve increased by 46.4 ×10⁴t, and water-drive recovery increased from 48% to 50.3%. It provides an effective way for development of reservoirs of the same type.