Abstract: The Li-rich clay rocks of Middle Permian Liangshan Formation in central Yunnan Province are distributed in the mudflat zone of estuary and coastal plain swamp area on the east side of central Yunnan archicontinent during Liangshan Period. The clay rocks of Liangshan Formation are composed of four lithologic types, including gray-greyish brown ferric bauxite rock, grayish white-red kaolinite clay rock, gray-greyish green clay rock, and gray black-black hydromica carbonaceous clay rock. It is found that the paleogeographical environment of brackish water transition to saline water, weak oxidation-reduction, low energy and limited retention is conducive to the formation of Li-rich clay rocks. Under the stable tectonic environment and the condition of warm-humid paleoclimate and hilly paleoterrain, the Cambrian-Devonian magnesian carbonate rocks in central Yunnan archicontinent form the Li-rich clay by secondary weathering, and then Li-rich clay rocks through transport and sedimentation. Dongchuan-Fumin of Kunming, Hongta-Jianshui of Yuxi and Yongsheng-Ninglang of Lijiang are prospect areas for Li-rich clay rocks.