Abstract: The large-scale gravity and magnetic survey was carried out in the area delineated jointly by magnetic anomaly and gravity anomaly in Qihe-Yucheng area of Shandong Province. The rich iron ore deposit with a total thickness of 72.73m and a total iron grade of 56.75% were found for the first time and verified by drilling, which achieved a significant new discovery in geological prospecting. The orebodies which belong to skarn type magnetite were formed in the contact zones between late Yanshanian intermedite-basic magmatic rock and Ordovician limestone. The discovery of the iron ore deposit is one of the most important geological discoveries in recent years in Shandong Province, which opens up a very broad prospect for further development of rich iron ore exploration in Qihe-Yucheng area.