Abstract: The characteristics of in-situ stress is critical for coalbed methane exploration and development, especially for fracturing design. The paper is devoted to explore the distribution characteristics of in-situ stress in Laochang, eastern Yunnan. Based on log data, rock mechanics test and hydraulic fracturing curve, using Anderson model with added stress term, the in-situ stress of coalbed methane reservoir in Laochang area was calculated. The distributions of in-situ stress and its influence on reservoir permeability were also analyzed. The results show that the in-situ stress of coal reservoir in Laochang Mining Area is between 10 and 30 MPa, which is defined as high stress zone. The maximum horizontal principal stress (σH), the minimum horizontal principal stress (σh), and the vertical principal stress (σV) increase with the depth. As the increase of depth, the dominate stress field gradually turns from horizontal principal stress into vertical principal stress, with transition point at 800 m. When depth is less than 800 m, the horizontal stress is largest, which indicates that the strike-slip faults(σH>σV>σh)are active and coal seam is in compression state. When depth is higher than 800 m, the vertical stress is the largest,where is mainly the normal faults(σH>σV>σh),the vertical stress is the dominant stress and the coal seam is in the tension state. The results also show that the lateral pressure coefficient is within the inner and outer envelope of China and Hoek-brown. With the increase of depth, the lateral pressure gradually decreases from above 1 to below 1 at the depth of stress transition zone. Permeability at different depth is also determined by in-situ stress. When depth of coal seam is less than 800 m, the pore closes gradually under the action of compressive stress and the permeability decreases exponentially with the increase of depth. When depth is larger than 800 m, the vertical principal stress is the main factor to determine permeability. Reservoir is in tension stress state and nature fractures develop vertically. As nature fractures open under the effect of vertical principal stress, permeability increases with depth. The variation of permeability at different depth is basically the same as that of stress field.