Abstract: The Oujiang Sag in the East China Sea shelf basin is an important area of oil and gas exploration, and research on its fault system and formation mechanism is of great significance for understanding regional tectonic evolution and hydrocarbon accumulation. Based on the latest collected 2D multi-channel seismic data in the area, we investigated the fault development and its formation dynamic mechanism using seismic data interpretation and balanced section restoration technology. Results show that the Oujiang Sag has a geological structure characteristic of a half-graben faulted depression in the “east faulting and west overlapping” pattern, and developed mainly two types of faults, namely depression-controlling faults and secondary faults. Depression-controlling faults controlled the development morphology of the sag, while secondary faults dominated the structural style within the sag. Fault development could be divided into early, middle, and late stages, and the activity intensity weakened gradually from the Late Mesozoic to the Cenozoic. Affected by the superposition of multi-stage tectonic processes including the subduction of the Pacific Plate and the collision between the Indian Ocean Plate and the Eurasian Plate, the evolution of the Oujiang Sag has experienced 4 distinct stages, i.e., rifting, depression, uplift, and stable subsidence, which ultimately shaped the current tectonic framework. This study deepened our understanding of the structural deformation characteristics of the Oujiang Sag, revealed the dynamic controlling factors of fault development, and provided important theoretical support for the exploration of Mesozoic-Cenozoic oil and gas resources in the area.