Abstract: The effect of hydraulic fracturing depends highly on the extent of understanding formation.In order to understand reservoir and evaluate the quality of fracturing treatment,considering fracture conductivity variation during producing process,a mathematical model that describes fluid unsteady flow in the formation and fracture is established,which is iteratively solved by means of utilizing the alternative direction implicit for solving flow models in formation and utilizing prediction-correction method for solving flow models in fracture.An optimization model of automatic matching production history to determine fracture parameters is put forward,which is solved by the sequential quadratic programming method.The credibility and applicability of these models and methods are proved by sample calculation.