The Changxing Formation reef in the Sichuan Basin is a representative of the reef reservoirs in China and the world. In this paper, the authors carried out a relatively comprehensive analysis by viewing the whole basin, with emphasis on the influence and controlling of basement faults on the reef distribution and development. It is indicated that abundant deep and large NE- and NW-trending basement faults were developed during the Late Permian Changxing period. The activity of the faults is supported by stratigraphic, lithofacies and tectonic evidences. This new understanding can help to broaden the regional petroleum exploration strategy, and can provide new information for theoretical study of the reef hydrocarbon accumulation.