Abstract: In order to further study the development potential of unconventional natural gas in coal-bearing formations, this paper took coal measures mudstone in Huoxi Area of Shanxi Province as the main research objects, then the reservoir characteristics of coal measure mudstone in Huoxi were analyzed from the aspects of lithofacies characteristics, mineralogical composition and pore permeability based on the test results of mineral composition and porosity. The reservoir characteristics of coal-bearing mudstone formations in the Huoxi Area were analyzed. At the same time, the hydrocarbon generation potential of the coal-bearing mudstone formations in the Huoxi Area was preliminarily evaluated from three aspects of source rock organic matter abundance, type, and maturity. The results show that the mineral composition in the study area is mainly clay minerals, and there are large thickness, low porosity and poor permeability, which provides good conditions for the preservation of coal measure gas. At the same time, the type of organic matter in Huoxi Area is mainly Type III kerogen with strong pyrolysis hydrocarbon generation ability, and 68% of the samples with organic carbon content greater than 1.5%, and the maturity of organic matter Ro is mainly 1.8% to 2.0%.In addition, the TOC content of coal measures mudstone of Taiyuan Formation is as high as 3.94%, which is the main reason why its hydrocarbon generating potential is higher than the coal measures mudstone of Shanxi Formation and Lower Shihezi Formation. Thus it can be preferentially viewed as a favorable exploration area.