Abstract: Two phases of faulting once occurred in the South Yellow Sea Basin:Late Cretaceous to the Palaeogene, and the Neogene to the Quaternary, of which the Pliocene to the Quaternary is the main periods when the neotectonic movements were accentuated in the South Yellow Sea Basin. Vertically, the early NS-trending compressional faulting lead to the development of the extensional normal faults whereas the late EW-trending compressional faulting lead to the development of the thrust faults and folds. Horizontally, the downwarped faulting is highly active and the normal faults are well developed in the northern part of the Basin whereas in the southern part of the Basin, the downwarped faulting is relatively inactive. The timing of the neotectonic movements cited above is thought to be in agreement with those of the generation and expulsion of the hydrocarbons in the source rocks from the northern depression. The faults generated by the neotectonic movements may serve as not only the vertical migration channels for the hydrocarbons but also the favourable areas for the oil and gas accumulation in the South Yellow Sea Basin.