The Yutang Pb-Zn deposit shows great potential for ore exploration in western Hunan Province. It occurred in the carbonate rock of Qingxudang Formation of Lower Cambrian, where the extending mineralized belt coincides with the algae reef bank facies zone. The ore bodies are of multi-layers with gentle dipping and conformable beds. They are dominated by Zn and coexisting Pb-Zn, showing zonation to some extent, and microcrystal, finecrystal and gel textures. The ore-forming materials came from Pb2+ and Zn2+ ions absorbed by algae and carbonated mud. Stable isotope data indicate that the lead (Pb) of this area is mainly from the upper crust. The sulfur (S) mainly originates from the sulphate of the carbonate rock series. Therefore the deposit genesis is sedimentation-diagenesis type with the nature of post-diagenesis.