Ordos basin is one of the most important oil and gas basins on land in China. The Yanchang Formation of Triassic is the main oil- bearing horizon of the basin. In this paper, based on the observation and measurement of a large number of field outcrops and drilling core data, combined with indoor identification and analysis, the paleoclimatic environment and sedimentary characteristics of the Yanchang Formation are systematically studied, and the following cognitions are obtained: ① In the sedimentary period of the Yanchang Formation, the climate is divided into three parts: the early stage is arid environment; the middle stage is transformed into a biologically rich warm and humid climate environment, which isthe most favorable period for the development of source rocks; the later stage is transformed into semi- arid- semi- humid climate environment. ② Controlled by arid climate, there is no large- scale catchment area in the early and late stage of the Yanchang Formation. Flood events dominated the formation and distribution of large- scale sand bodies in the central area of the basin, especially the relay transport and multiple sorting of floods may be the main reason for the generally fine grain size of sandstone in the Yanchang Formation. ③ There are two environmental sedimentary models of drought and humidity in the Yanchang Formation.The former is characterized by the fluvial fan system in the low stand system tract and the latter is characterized by the fluvial- delta- lake- gravity flow system in the lake transgression period. ④ Fluvial fan sand bodies in arid environment low- stand system tract match with the rich organic mudstones in wet environment transgressive system tract, forming the characteristics of the Yanchang Formation, which is full of sand and oil. This study completely changed the traditional understanding that the “Large Depression Model” was dominated by “delta model” in the past. It has a positive significance for enriching the theoretical understanding of continental basin sedimentation and guiding oil and gas exploration practice in China.