Abstract: The detailed research on the cracks propagation and permeability evolution are significant for better determining the recovery efficiency in the process of gas extraction for the reservoir shale.Aimed at the deficiency of the traditional fluid-solid coupling algorithm based on Particle Flow Code(PFC),a new algorithm is proposed to use the geometrical shapes to replace the particles contacts, which solves the failure of the flow channels induced by the failure of the particles contact, practically describing the flow superiority of the cracks.And the numerical model is proposed based on the improved fluid-solid coupling model to analyze the water pressure and flow rate under complex loading conditions, and the simulations are rationally calibrated by the testing results.And then, the permeability evolution of the shale considering different combinations of the confining pressure and water pressure are deeply investigated, the results indicating that the bedding angle plays an important role on the initial permeability, and the permeability increases with increasing bedding angle considering the constant confining pressure, and the permeability decreases with increasing confining pressure considering the constant water pressure.Finally, the failure modes are deeply investigated under above loading combinations, and the crack shapes are obviously different, showing that there are much more cracks mainly resulting by the shearing failure or tension-shearing failure considering the combination of the high confining pressure and high water pressure.The above achievements may give a scientific and technological support for simulating the seepage channels and permeability evolution induced by the hydraulic fracturing in the reservoir shales.