Abstract: Two ecological types of rugose coral fauna may be recognized in the Qijiagou Formation of the Upper Carboniferous in the southern margin of Junggar Basin. One is the Cyathoxonia fauna dominated by small solitary forms without dissepiments. The other is the Caniniid–Clisiophyllid fauna dominated by large forms with dissepiments. It is considered that the rugose coral fauna from the Qijiagou Formation lived in an atoll–like environment around the crater in a temperate climate of mid to high latitudes. The Cyathoxonia fauna lived in relatively isolated, low–energy and shallow–water lagoons connected to the open sea and was preserved in situ; while the Caniniid–Clisiophyllid fauna lived in mid to high energy reef flat environments, which was favorable for coral growth, on the seaward side of the atoll. The latter was constantly eroded by waves, under the influence of storms and gravity, slid down along the steep foreslopes of the atoll in the form of gravity flows, and preserved in low–energy environments below the normal wave base.