The tight sandstone reservoirs of Permian are well developed on the Laoshan Uplift of the South Yellow Sea, where the reservoirs are interbedded with source rocks and have excellent conditions for near-source hydrocarbon accumulation. Based on the borehole of CSDP-2 recently drilled on the Laoshan Uplift, the characteristics, distribution patterns and the main controlling factors of the reservoirs are comprehensively studied by this paper with the data from seismic reservoir prediction and laboratory testing, which includes reservoir properties, casting thin sections, scanning electron microscopy, x-ray diffraction, fluid inclusion, et al. The results suggest that the Permian sandstone reservoirs belong to the kind of tight reworked reservoir, which have suffered strong compaction and complex diagenetic evolution and are characterized by extremely low porosity and permeability. However, fractures are well developed. The distribution of the reservoirs is controlled by three factors: sedimentary facies change laterally, source rock overlapping vertically, and fracture connection internally. Reservoir properties and their spatial distribution are jointly controlled by sedimentary environment, diagenesis and tectonic events. There are two periods of hydrocarbon charging in Permian on the Laoshan Uplift and the sandstone reservoir has experienced two major processes: the formation of tight reservoirs and fracture transformation. According to this research, the Permian of the Laoshan Uplift has great exploration prospect, and future exploration should focus more on reservoirs with better preservation conditions.