The reservoir physical properties, pore types, diagenetic characteristics and reservoir quality controlling effect of the Xishanyao formation coal measure sandstone in the southern margin of the Junggar basin were discussed in this study based on thin section observation, high pressure mercury injection, low-temperature nitrogen adsorption and scanning electron microscope observation. The result shows that the porosity and permeability of the sandstone are generally low with a medium-high texture maturity and low compositional maturity. The sandstone storage space is mainly composed of residual intergranular pores, secondary dissolution pores, inter-crystalline pores and micro-fractures. The diagenetic stage of coal measure sandstone is in the mesodiagenesis A1-A2 stage, and their diagenetic interaction types mainly include compaction, cementation and dissolution. The reservoir quality of the coal measure sandstone deteriorates by compaction due to high matrix content and plastic debris content. Because of the large amounts of organic acids generated during the thermal evolution of the coal measure source rock, the coal measure sandstone suffers from strong dissolution. The secondary dissolution pores formed by the massive dissolution of feldspar, lithic fragments and early carbonate cementation in the sandstone significantly improved the reservoir quality. In the coal measure sandstone, clay mineral cementation is the most developed cementation form, followed by quartz cementation and carbonate cementation. Although kaolinite cementation and dolomite cementation can generate a small number of inter-crystalline pores, cementation deteriorates the reservoir quality. The Xishanyao formation coal measure sandstone formed in a lacustrine-delta environment, and its composition and texture make it susceptible to the influence of compaction and dissolution during diagenesis.