Through optical observation of thin section, combined with X-ray diffraction and chemical analysis, this paper disclosed the formation mechanism of color, lustre and “water weeds” of the Dabieshan jade, indicating that the colorlessness is the authigenic color of quartz aggregates, the green and dark green colors are resulted from some content of chlorite in the jade, the white color is false color caused by voids.The red-yellow color of the river jade is resulted from oxidization of iron-bearing mineral contained in it or infiltration of outside iron-bearing substance.Different lustres are due to quartz grain sizes and “water weeds” is formed by Fe- and Mn-bearing substance injection through fissures.