The sedimentary system，tectonic features, lithological features and diagenesis of Palaeogene of Shahejie Formation in the eastern Chezhen Depression of Shandong Province are studied in detail. The characteristics of compaction and solution, cementation, secondary porosity during diagenesis processes and the distribution of secondary porosity zone in Chenzhen depression are described. The features of the cementation of carbonate cements and clay minerals indicates that the transition of the clay minerals montmorillonite—illite has evolutionary pattern of obvious gradation and mutation, and that the evolutionary processes experienced montmorillonite zone, gradation zone, rapid transition zone and illite zone. According to the relation of transition from montmorillonite to illite, the diagenesis of Shahejie Formation is divided into the early diagenetic stage (stage A, stage B), and the late diagenetic stage(stage A, stage B, stage C). The dividing indexes of the diagenetic stages are proposed.