The Lishui-Jiaojiang Sag was a fault basin developed on the continental margin from the Late Cretaceous epoch. The amount of extension, the extensional coefficient and the extensional ratio of the basin at the different areas during the varied faulting time of extension have been obtained by means of the technique of balanced geological cross-sections in this paper. Characteristically, the basin was developed by the episodic rifting during the Late Cretaceous to the Paleocene in the Lishui-Jiaojiang Sag. The evolution of the fault basin can be divided into three stages, of which the fault sags in Late Cretaceous were composed of some relatively dispersal and independent small half grabens controlled by “domino-style” normal faults, the fault sags in Early Paleocene composed of “rollover style” half-grabens controlled by listric normal faults, and the fault depressions in Late Paleocene composed of “composite” half-grabens controlled by ramp flat normal faults. The lateral extensional ratio is varied in different parts of the studied area, the amount of lateral extension became larger from the northeast to the southwest, and correspondingly, the time of major extension became later from the southwest to the northeast.