Based on the occurrence environment, the components and simulated thermal reduction reaction experiment of generating hydrogen sulphide, it is proposed that five necessary geological conditions for hydrogen sulphide generation are: (1) abundant gypse that exists in layers; (2) abundant hydrocarbon reductant; (3) relatively deep burialdepth or relatively high geothermal temperature; (4) formation water as medium and reaction house; and (5) the closed seal system. The most important one of them, which has been ignored yet, is that proceeding of thermal reduction reaction must be in water, and only sulphur in sulphuric acid root hydrolyzing from sulphate is the direct supplier that generates hydrogen sulphide. Formation of hydrogen sulphide is a processing that the gas might dissolve into formation water and then escape from it. Because of the closed relationship between the both, the hydrogen sulphide-bearing gas is commonly present near the gas/water interface, in the excellently sealing lithologic or structural gas reservoirs, and in structurally lower places and downdip direction. However, separating of the hydrogen sulphide-bearing gas from the formation water will probably happen as structures uplift after.