The Neogene lacustrine carbonate rocks are widely developed in the Nanyishan Oilfield in the western part of the Qaidam Basin, of which the algal limestone reservoir is the optimal reservoir. In order to further explore its reservoir characteristics and controlling factors, the algal limestone reservoir of the neogene Youshashan Formation III-V oil group in the Nanyishan Oilfield was studied through centimeter-level core descriptions, comprehensive analysis of samples taken from key wells, logging and recording well data, located in the western region of the Qaidam Basin. It is found that the reservoirs of Youshashan Formation III-V have obvious miscible characteristics, dominated by carbonate rocks with an average mass fraction of 40. 2% , and the average mass fractions of clay minerals and terrigenous clasts are 27. 8% and 23. 2% , respectively. The lithology of the reservoirs is mainly dominated by algal limestone and grey dolomites, with an average volume fraction of 33. 6% and 42. 9% , respectively. Algal limestone is divided into three types: algal mass limestone, algal stromatolite limestone and algal clot limestone. The main structural components are algal spherules and endoclasts, followed by algal filament structures, clumps, algal debris and cohesive fabric. Grey dolomites are divided into sandy limestone, granular micrite and micrite, with lithologies mainly consisting of particles, micrite matrix, and cement. Reservoir pores in the study area are dominated by dissolved pores and intercrystalline pores, and microfractures are developed. The algal limestone is dominated by dissolved pores, showing strong non-homogeneity with a median saturation radius of 0. 085 μm, small throat size, sample porosity of 23. 17% , permeability of 54. 3 mD, and displacement pressure of 2. 97 MPa, which exhibits high pore and medium seepage characteristics. The grey dolomite has uniform pore throat, with median saturation radius of 0. 039 μm, micro- throat channel, sample porosity of 17. 24% , permeability of 15. 13 mD, drainage pressure of 10. 34 MPa, showing the characteristics of medium porosity and low permeability. The pore structure of algal limestone is better than that of limestone, and the reservoir quality is higher. The reservoir in the study area is mainly controlled by lithology, mineral type and content, and diagenesis. The increase of shale content will reduce the reservoir quality, while the carbonate rock content is positively correlated with the reservoir quality. The dissolution and dolomization are constructive diagenesis for the reservoir, which improves the spatial structure of the reservoir, and the cementation will destroy the reservoir structure and reduce the physical properties of the reservoir.