Abstract: Shear zone has direct influence on stability of dam foundation, which is an important engineering geological issue, and is very common in the construction of hydroelectric project. Studying the engineering geological characteristics especially development and distribution characteristics of shear zones has significant and positive influence on the process of construction. In this paper, the sedimentary environment and facies in the dam area are investigated by the result of lithology, mineral composition, mineral formation, grain size parameters, sedimentary structure and so on. Development mechanism and distribution characteristics of shear zone then are studied based on the regional geological structure and the results of palaeosedimentary environment and sedimentary microfacies of protosomatic weak intercalation. Taking the distribution characteristics of shear zones into account, stability of dam foundation further is analyzed and evaluated. The results display that development and distribution of shear zones are determined by sedimentary environment and facies. It arises at the top of hemicyclothem frequently. Due to the multiple lithofacies, uncontinuity of spatial distribution of shear zones is very common. The types of the same shear zone in different position are also various. In addition, XRD and XRF results show that shear zones are highly dispersed system which is composed of various clay minerals, which demonstrates different engineering geological characteristics and strength parameters. Furthermore, FLAC^3D states that the uncontinuity of spatial distribution and behaviors of shear zones have great influence on the stability of dam foundation, concerning to the project duration and cost directly. Consequently, studying the shear zones from the perspective of sedimentary environment and facies is available to have a clear understanding about development and distribution characteristics of shear zones, having significant influence on the evaluation of engineering geological condition and stability analysis of dam foundation.