Using the water depth reconstruction based on the microfossil abundance and faunal composition from wells at the Yinggehai Basin of the northern South China Sea, the authors discussed the seismic boundary and re-evaluated the Neogene sequence stratigraphy in the Yinggehai Basin. The sequence interface S40, S28 and S27, are suggested to be of the canyon erosion. The uplifted wall of “fault No.1” has undergone the process of canyon erosion and movement. And good reservoir for gas and oil is formed in the lower part of S29, which is thought to be another important target region in future exploration.