Taking the compacted sandstone gas accumulation in Upper Triassic Xujiahe Formation of the middle area of Sichuan Province as an example, this paper discusses the process and mechanism of the compacted sandstone gas accumulation and provides the evidences for the next pace of exploration and exploitation of this sandstone gas accumulation. By and large, the compacted sandstone gas has three characteristics in Xujiahe Formation of Middle Sichuan area: 1） the migration distance of the natural gas is short； 2）the filling form of the natural gas is in free phase; and 3） the decompression and inflation of the natural gas plays an essential role in the natural gas accumulation in the process of uplift.