The Zengmu Basin is a large Tertiary marine sedimentary basin in the southern region of the South China Sea. It is considered to have multiple combinations of source rocks, reservoirs and caprock, making it a favourable prospect for oil and gas. Seismic investigations have shown that this has three tectonic sequences separated by two unconformities. The upper sequence consists of Oligocene to Recent marine sediments, the middle sequence is thought to be composed of Paleogene to Eocene shelf, neritic clastic deposits and the lower sequence is interpreted as being pre-Tertiary metamorphic or igneous rocks. The development of the basin has been controlled by faults, especially by northwest-trending faults, leading to gradual stepped-block subsidence to the northeast. Three fault systems trending NW, NE and S-N separate the basin into ten secondary tectonic units with five depressions and five highs. Taking into account the seismic reflection data collected during the 1987 survey by the Shiyan II and the geological information available from earlier work, this paper elucidates our understanding of the sequences division, and tectonic subdivision, and of the formation, evolution, and oil and gas prospects of the Zengmu Basin.