Abstract: In the northwest of Tarim basin, the Early Permian section exposed thick layer of algae reef limestone, which is an important target layer for the oil-gas prospecting areas. The trace elements of the algae reef limestone showed a seawater-like pattern of LREE depletion, negative Ce anomaly and positive Gd anomaly. The high Y/Ho and Er/Nd, and the extremely low Th indicate that it was not affected by terrestrial debris. δCe had moderate to weak negative anomalies, δU<1, V/(V+Ni) between 0.16~0.20 and V/Sc between 4.28~5.14 indicate that algal reef limestone formed in an oxidizing environment. Sr/Ba is between 16.19~25.77, indicating that the seawater was in a saline environment. Sr/Cu is between 176.42~361.54, indicating the arid climatic condition. Based on various geochemical characteristics, it is inferred that the algae reef limestone in the northwest of Tarim basin was formed in a limited carbonate platform environment.