CO2 injection into reservoirs might induce organic or inorganic precipitation in microscopic pores, and some of the pores are blocked by the precipitates, resulting in a decrease in the connectivity of pores and affecting oil recovery. In this paper, a set of experiments on CO2 displacement and CO2-water-oil-rock interaction are conducted to study the microscopic mechanisms of reservoir damage. In-situ Nuclear Magnetic Resonance (NMR) technology is applied to conduct the microscopic analysis of CO2-EOR and reservoir damage at real reservoir conditions. The results reveal that the particle size and the amount of inorganic precipitates formed in the formation water will increase with the rise of CO2 injection pressure, and the inorganic precipitates primarily consist of siderite and kaolinite. The change of NMR T2 spectra of the core samples reveals that the inorganic precipitates primarily block the small pores less than 0.89 μm. However, as a result of stronger mineral dissolution and solute transport, the pore volume of the large pores (greater than 0.89 μm) increases after the CO2-water-rock reaction. Ultimately, this interaction results in a 5.4% increment in pore volume. In addition, the displacement efficiency of water-saturated cores is improved after the first CO2 displacement, which indicates that CO2-water-rock interaction can effectively improve the seepage properties of reservoirs. Nevertheless, the reservoir damage caused by asphaltene precipitation during CO2 flooding is more significant. The asphaltene precipitation percentage in formation oil increases with the rise of CO2 injection pressure, reservoir temperature, and asphaltene content in virgin oil. CO2-induced asphaltene precipitation causes more severe blockage on small pores in comparison with large pores. After two hours of CO2 injection to the oil-saturated core, permeability and oil recovery caused by CO2-induced precipitation decreased by 17.6% and 11.4%, respectively.