Abstract: Diaoyu Islands folded-uplift belt (DIFB) is at the east edge of the East China Sea basin. It lies between the eastern depression zone in East China Sea basin and the Okinawa trough basin. This article analyzes the peripheral geology of East China Sea, and recognizes the DIFB is part of the East China Sea shelf outer margin uplift, which was formed in the late Cretaceous. The basement of the uplift is Proterozoic metamorphic rock, thereon has late Paleozoic -Mesozoic's residual stratum, in Miocene it was divided into DIFB and Ryukyu uplift. The characteristics of the East China Sea shelf outer margin uplift is "early forming later transformation". As the Philippine sea plate movement began in Miocene, and the eastern depression zone was bounded by Yushan-Jiumi transform fault, it had different evolution process. Based on this understanding, DIFB is considered to be an eastern source area of East China Sea basin. Both the Xihu sag and Jilong sag have the continental margin back-arc rift basin' properties. Only for difference in migration of subduction zone in Philippine sea plate, the southern Jilong sag, with a definite trend, has become the back-arc rift basin.