Shale samples from the Cretaceous Madongshan Formation (Fm.) (Well Guye 1) in the Liupanshan Basin were used for reservoir characterization via core logging, thin section petrography, X-ray diffraction (XRD), scanning electron microscope (SEM) imaging and isothermal adsorption. The results show a variety of lithologic facies, such as shale, argillaceous carbonates, dolomite, carbonate-/dolomite-bearing or calcareous/dolomitic mudstone. In particular, the carbonate-/dolomite-bearing mudstone have higher TOC contents than the other rock types. The shale reservoir, with characterizing low porosity and low permeability of the Madongshan Fm., have a low clay content and relatively high feldspar and carbonate mineral contents. Optical microscopic and SEM petrographic observations reveal four kinds of microfractures (i.e.stratiform, stockwork, dissolution and intergranular fractures) and three kinds of pores (i.e.intergranular, dissolved and intergranular pores). The dissolved pores are filled by carbonaceous material, calcite, dolomite, plagioclase, illite and gypsum. The pore and fracture sizes vary mainly from 2 to 10 μm, and locally from 10 to 33 μm. Isothermal adsorption shows that CH4 adsorption capacity of the Madongshan Fm. shale is between 0.96 and 4.6 m 3/t (average 2.29 m3/t). The Langmuir pressure is between 1.27 and 2.21 MPa (average 1.74 MPa). It is suggested that the Madongshan Fm. shale has a strong gas storage capacity but is difficult to be desorbed. To summarize, the Madongshan Fm. shale is a potential good oil and gas reservoir, characterizing by its abundance of pores and fractures, low poisson ratio, high brittleness, relatively good gas storage ability and readiness in development.