Abstract: Dam foundation engineering geological conditions are very important to the safety and durability of hydraulic structures. Fault, fissure and fracture zones, and silty sand layer were exposed in excavation of dam foundation of Yueliangwan Dam. The inhomogeneous deformation rate and seepage problems are the key to dam foundation treatment. According to the main engineering geological problems, measures like foundation cleaning, consolidation grouting and replacement treatment and so on were taken, which significantly improved the foundation rock mass quality. Deformation monitoring during construction period showed that the settlement decreases from the center of the dam to two abutments, the settlement differences of adjacent dam sections are relatively small, and the settlement of the dam tends to be stable.