The deep strata of the northern margin of the Qaidam Basin are currently unexplored and have high resource potential. To clarify the characteristics and control factors of the deep sandstone reservoir in the study area, a comprehensive investigation of the Xiaganchaigou Formation deep reservoir in the northern Qaidam margin is carried out using the casting thin section, SEM, porosity and permeability measurements, and well logging and mud logging data. The results show that the feldspar lithic sandstone and lithic feldspar sandstone, which are well sorted and medium-rounded and have high compositional and textural maturities, make up the majority of the deep reservoir rock of the Xiaganchaigou Formation in the northern Qaidam margin. Extensive development of primary pores is observed and the porosity and permeability are well correlated with each other, with the average porosity and permeability of 10.7% and 25.74 × 10−3 μm2, respectively. The pore-throat has excellent connectivity and is medium-fine in texture. The sands of the braided river delta front underwater distributary channel deposition and the sheet sands of the shore-shallow lake deposition are the basis for the formation of high-quality reservoirs. The carbonate cement is subjected to prolonged early shallow burial and late rapid burial during the diagenesis, effectively protecting primary pores. Feldspar particles and early carbonate cement are partially dissolved during the telodiagenesis, improving the physical properties of the reservoir by generating a certain number of inter- and intra-granular dissolved pores. Thick mudstone layers are deposited both above and below the sandstone reservoir. The drainage of pore fluids from the sandstone reservoir is therefore suppressed during the deposition-diagenesis and rapid burial, trapping the fluids in the pore space to bear part of the overburden pressure. This reduces the effects of normal compaction on the reservoir rock and helps in the preservation of primary pores to a large extent. The abnormal pressure zone in the Palaeogene Xiaganchaigou Formation, which develops the under-compacted mudstone of the braided river delta deposition, is found in the central part of the northern Qaidam margin and is afavorable play for natural gas exploration and development.