Abstract: The genetic conditions of the shale gas and delineation of the favourable areas in the Wufeng Formation-Longmaxi Formation on the southwestern margin of the Sichuan Basin are dealt with in detail on the basis of distribution, lithology, organic geochemical signatures, reservoir physical properties, gas contents and stratigraphic pressures of organic matter-rich shales indicated by the new data of outcrops and core samples. The Wufeng Formation-Longmaxi Formation on the southwestern margin of the Sichuan Basin are characterized by high organic carbon contents (TOC=0.12%-6.49%, an average of 2.06%), great thickness (> 30 m), highly thermal evolution (R₀=2.62%-2.80%), high brittle mineral contents (56%-92%), high porosity (0.50%-11.36%, an average of 3.85%), high gas contents (> 3.38 m³/t), and shallow burial depths (< 3500 m), which are favourable for the generation and enrichment of the shale gas. The Yunqiao, Mugan and Gaoqiao areas in Yunnan are delineated as the favourable areas for the exploration of the shale gas on the southwestern margin of the Sichuan Basin.