A layer of oolitic hematite deposit occurs at the bottom of the Carboniferous Zongchanggou Formation in Longmenshan, Sichuan Province. An analysis of components, texture and relative characteristics of oolitic hematite enables us to make an estimation. It is held that the oolitic iron was formed in a semi-closed or closed barrier-lagoon environment. The iron and aluminum weathering crust formed in late Yanguan stage provided the material foundation for the generation of oolitic hematite.