The Chaidam Basin forms one of the deepest sedimentary basins in the world, with over 14kms of sediment deposited since the Oligocene. Basement rocks consist of: (i) pre‐Sinian gneisses; (ii) Sinian and Lower Palaeozoic sediments folded by the Silurian ‐ Devonian orogeny; (iii) Upper Palaeozoic molasse in a half‐graben produced by the collapse of the Silurian mountain belt; (iv) Carboniferous terrestrial to shallow‐marine facies sediments deposited on the margins of Palaeotethys; and (v) Permo‐Triassic sediments deposited in a back‐arc basin N of the Palaeotethyan subduction zone.Triassic back‐are basin development was followed by thermal subsidence during the Jurassic to Eocene, with a low sedimentation rate, modified by flexural subsidence on the margins of the thickened and uplifted S Qilian Mountains. Gentle folds and SW‐propagating thrusts were developed in Jurassic strata. The region was uplifted as a whole during Early Jurassic and Middle Cretaceous times.The main period of subsidence occurred from the Oligocene to the Recent, producing a deep hinterland basin in western and central Chaidam. Uplift along the Kunlun and the Aerjin Fault Zone provided a ready sediment supply. Basin subsidence throughout the Neogene probably reflects lithospheric flexure due to the loading of the Tibetan lithosphere, although the rapid increase of Sedimentation during the latest Tertiary and Quaternary must reflect rapid Recent uplift of the Tibetan Plateau. During the Pliocene and Pleistocene, there was inversion and shortening of the Basin, associated with reworking of the Mesozoic strike‐slip and thrust faults. Thus, the Aerjin Fault Zone was reactivated to control the shortening direction across the Basin. Mesozoic thrusts were reactivated along the NE margin of the Basin during the Pliocene, but by Pleistocene times, WNW‐trending folds developed throughout the western part of the Basin. There was differential uplift; the zone nearest the Aerjin Fault was uplifted most, causing tilting and variations in sediment thickness and facies from NW and SE.There are numerous source rocks formed by lacustrine facies sediments of Jurassic and Neogene age. The burial history and the timing and location of structural and stratigraphic traps has controlled the locations of the major hydrocarbon occurrences in western and NW Chaidam. An evaluation of hydrocarbon prospectivity is given in the light of the tectonic ‐ stratigraphic framewo