Abstract: The smectite whose occurrence is the clay coating in the sandstone of Xiagou formation in Ying’er sag is a kind of typomorphic mineral which can be used to predict reservoir physical properties. Using cast thin section analysis and SEM technology, the paper observes the occurrence of smectite coating and studies its forming mechanism and the influences on reservoir physical properties, in order to provide scientific basis for hydrocarbon exploration and development in Xiagou formation of Ying’er sag. The study shows that the smectite with poor crystal shapes adhered to the surface of clastic particles like capsules and became clay coating. The coating material came from the infiltrated atmospheric water carrying clay particles and the coating-forming time was after the calcite cementation during the early diagenesis stage A. Smectite coating coexists with quartz cements and the quartz cements are sparsely distributed or cover the surface of the smectite coating as the secondary enlarged edges of quartz. Therefore, the smectite coating growing on the wall of pores can’t inhibit the secondary enlargement of quartz, and make no contributions to the preservation of pores in sandstones, but it is a good typomorphic mineral to indicate physical properties of sandstones