Abstract: A set of rare earth rich clay rocks is widely distributed in the lower part of The Permian Xuanwei Formation and upper the Emeishan basalt in the Yunnan-Guizhou border region. As a new type potentisl rare earth deposit, researchers have studied it and got great progress, including metallogenic conditions, occurrence state, enrichment regulation, multipurpose utilization methods and so on.This new type deposit holds giant resource potential, great regional continuity, high concentration, enrich high value rare earth element, such as Pr, Nd, Td, Dy, and economic value and large potential of development and utilization. This paper summarizes the current research progress and key problems of rare earth in rare earth rich clay rock, Xuanwei Formation, and discusses the next research direction. At present, there has not definited on the enrichment mechanism of rare earth elements in rare earth rich clay rock, xuanwei Formation, and further research on metallogenic theory is the key to breakthrough in prospecting. It is urgent to make a breakthrough in the study of occurrence state, which is of great significance for the comprehensive utilization of this new type of rare earth. In terms of comprehensive utilization, economically feasible green beneficiation and smelting technology, comprehensive recovery of associated valuable elements Al, Nb, Zr and Ga, and reclamation and absorption of tailings are the main directions for the next step.