Abstract: Biyang Depression developed on the Qinling folded belt in a Eogene inland faulted oil-bearing basin, in which Oligocene Hetaoyuan formation expresses a large degression sequence, with a multiple cycle character. During deep basin-shallow water and desiccated deep basin period of basin evolution, the natural environmental conditions were favourable for the growth and bloom of blue green algae. In addition, the frequent fluctuation ,of high and low lake level, especially flush flood caused periodic terrestrial clastic supply, which combined with algal mats growed on the mud flat, forming cryptoalgal laminite cycles with a different rhythm. The cryptoalgal laminite can be divided into two kinds based on their shapes: 1) horizontal laminated cryptoalgal laminite composed of couples, namely 4ark and light laminae, with horizontal texture; 2) cryptoalgal laminite with an irregular deformed laminated structure, generally wave or dome-like laminae. The dark laminae composed of cryptocrystal calcite and Fe-dolomite has a dark colour by organic matter infection, under SEM it displays a algal mat form consisted of dense algal filaments; the light laminae consists of carbonate and algal fragments and fine clastic minerals. The coarse clastic grains were trapped by algal filaments. It is a significant fabric in the light laminae. By identification, there mainly are blue green algae fossils: Lyngya, Microcoleus, Phormidium and Hydrocoleus. Through the study of sedimentary sequence and facies, it was found that the cryptoalgal laminite with special structure was formed by living activity of carbonate-building algae community and periodic sediment input under arid-semiarid paleoclimatic condition and hence lake diminishing and increasing in salinity of lake water. The reasons formed two kinds of cryptoalgal laminite may mainly be water depth, dynamics, genera and species of algae and its degree of development and so on. The most favourable sedimentary facies belts for formation of cryptoalgal laminite are mud flat, interfandeltaic bay and interunstable channel on mad flat. The special texture and mechanism of formation for cryptoalgal laminite makes itself become a good indicator to paleoenvironmental analysis of oil-bearing strata in Biyang Depression. It provides the valuable date for oil-gas exploration in the basin.