In view of the problems of high casing damage ratio and prominent casing damage problem in Gasi Oilfield, Qinghai Oilfield, a casing damage mechanical model is established to clarify casing damage mechanism by analyzing the basic casing damage form and in-situ stress distribution, combining the geological, engineering and developing factors of casing damage: after the hydration of mudstone, the strength of mudstone decreases, which results in additional load on casing. When the stress on casing exceeds the yield strength of itself, casing is crushed and damaged. The poor cementing quality leads to a series of slots outside the casing and water injection into the mudstone section, which makes the mudstone hydrate and leads to casing collapse. Engineering factors such as perforation and dogleg degree lead to lower casing strength. According to the mechanism of casing damage, some preventive measures are proposed to optimize casing design, improve cementing quality, limit requirements of dogleg degree and optimize perforating parameters.