Abstract: China is the third largest permafrost country in the world with 2.15×106 km2 permafrost zones, which are mainly located in the Tibetan Plateau of western China and the Da Hinggan Mountains in northeastern China, where there are fairly good formation conditions and prospects for gas hydrate. The formation conditions and potential of gas hydrate in China's permafrost have been studied since the end of the 1990s. Five projects have been implemented by China Geological Survey, in which geological, geophysical and geochemical investigation, drilling, and remote sensing survey have been performed since 2002. Gas hydrate was discovered in the Qilian Mountain permafrost in 2008, which makes China to be one of the few countries that possess both marine and permafrost gas hydrates. However, there are four problems to be solved, i.e., relatively low exploration level, backward key technique and equipment, low-level basic research and lack of trial production test. Progress of the exploration and research and production test of gas hydrate in permafrost zones will be surely accelerated in China because of the increasing attention and support from Chinese government.