Abstract: For the first time the modern mud volcanoes were found in Suonahu area of Qiangtang Basin. Through collecting water samples and mud samples and analyzing water chemical ions, water soluble hydrocarbon gas, and carbon and oxygen stable isotope, this paper discusses oil and gas geological significance of modern mud volcanoes. Hydrochemical types and hydrogen and oxygen iso-topes indicate that underground reservoirs may exist in this area. The test results of water-soluble hydrocarbon gas show that the gas composition is C1~C5, mainly methane, consistent with the gas composition of the conventional gas reservoir, and the carbon iso-tope discrimination result shows that it is oil gas of pyrolysis origin. Combined with geological background of the mud volcano, it is shown that mud volcano is the product of oil and gas reservoir seepage and leakage, and hence good prospects for oil and gas explora-tion lie in well preserved and non leaking areas.