The lacustrine deep-water gravity-flow sandstone reservoirs in the middle of the third member of the Shahejie Formation (43.7–38.2 Ma) are the main exploration targets for hydrocarbons in the Dongying sag, Jiyang depression, eastern China. The impact of diagenesis on reservoir quality of these sandstones has been established by a variety of methods. Petrographically, the sandstones consist mainly of lithic arkose (with 43% of quartz, 33% of feldspar, and 24% of lithic fragment) with reservoirs having average porosity and permeability values of 17.1% and 38.1 md, respectively. In addition to their primary intergranular pores, secondary pores are well developed from feldspar dissolution, with pore-throat radii ranging from 0.01 to 40 μm. The dissolution of feldspar and transformation of smectite to illite may be the sources of silica for the first phase of quartz overgrowth, whereas illitization of kaolinite may be responsible for the second phase of quartz overgrowth. In addition, pressure dissolution of quartz is also an important source of silica for quartz overgrowth. Dissolution of feldspar has little impact on reservoir quality, whereas compaction and carbonate cementation are the main factors significantly reducing reservoir quality. Oil charge may have retarded carbonate cementation and generated overpressure that retarded compaction, thus preserving porosity. Precipitation of vermicular kaolinite, resulting from feldspar dissolution, promoted a change in the wettability of the reservoir, from water wet to oil wet, which is beneficial for oil entrapment. The central parts of medium- to thick-bedded sandstones that have experienced oil charge twice appear to have the highest-quality reservoirs based on petrophysical properties. This work provides a new interpretation of the formation mechanism of high-quality lacustrine deep-water gravity-flow sandstones reservoirs that have experienced multiple periods of oil charge.