Abstract: In order to study the effect of reservoir heterogeneity on steam chamber expansion in SAGD, the different distribution patterns of shale interlayer were built by sequential-indicator simulation (SISIM). Three new concepts of upper steam chamber fraction, lower steam chamber fraction and total steam chamber fraction were defined on the basis of reservoir numerical simulation. The influences of different shale interlayer distribution patterns and fracturing fracture forms on steam chamber expansion of SAGD were studied. The research results showed that the more the shale interlayer developed in the reservoir, the stronger the steam chamber expansion in reservoir was limited by the shale interlayer, and the trends that vertical expansion steam chamber was weaken and horizontal expansion was enhanced appearently very clear with the shale interlayer development. Well linear functional relationship was set up between overall steam chamber fraction and oil recovery under different shale probabilities. The fracturing fracture could improve the performance of steam chamber expansion and SAGD development. The vertical fractures could accelerate oil drainage rate of SAGD by enlarging the vertical steam chamber height, which made the development effect of vertical fractures better than that of horizontal fractures. Besides, as the shifted vertical fractures could decrease steam cross flow between injection wells and production wells caused by vertical fractures, the steam chamber expansion and SAGD development effect of the shifted vertical fracture were both better than that of vertical fractures.