With the transformation of the exploration strata in the Pearl River Mouth Basin from shallow to deep, the Paleogene has become an important stratum to increase additional oil-gas reserves and production in the Lufeng Sag at present. However, some problems, such as strong heterogeneity and difficult productivity release, seriously restricts the oil-gas exploration. The reservoir characteristics, diagenesis, and main controlling factors of high-quality reservoirs in the Paleogene Wenchang Formation and Enping Formation were studied comprehensively using the casting thin section, scanning electron microscope, physical property analysis, X-ray diffraction and other analytical and testing data from 36 Paleogene wells in the sag. Results show that the Paleogene reservoir in the sag is rich in quartz but poor in feldspar and detritus. The Wenchang Formation is mainly composed of lithic quartz sandstone characteristic of ultra-low porosity and ultra-low permeability, in average porosity of 11.15% and average permeability of 10.93×10⁻³ μm². The Enping Formation includes mainly feldspathic quartz sandstone characteristic of low-medium porosity and ultra-low-medium permeability reservoirs in average porosity of 15.23% and average permeability of 139.53×10⁻³ μm². The reservoir pore types are mainly intergranular pores, followed by intergranular dissolution pores and intragranular dissolution pores, but the proportion of dissolved pores in Wenchang Formation is high. The Paleogene reservoir is mainly in the middle diagenetic stage A. Compaction plays a decisive role in reducing porosity, cementation reduces reservoir physical properties, and dissolution further improves reservoir physical properties. The formation conditions of the Paleogene high-quality reservoir in Lufeng Sag include: ① abundant quartz content in the parent rock area, reflecting a long transportation distance, high composition, and structural maturity, low matrix content, and large thickness of single sand body; ② strong fluid transformation that improved the reservoir space. Feldspar dissolution significantly improved the Paleogene reservoir, especially the Wenchang Formation reservoir, and the sandstone reservoir with good fracture communication source rock or adjacent source rock has strong dissolution; ③ tuffaceous filling reduced the reservoir permeability. The area less affected by volcanic activity is more conducive to the development of high-quality reservoirs.