Based on actual data from J16 block in Liaohe Oilfield, this paper established physical models of 30 cm× 30 cm×1.5 cmareal heterogeneity horizontal well and 30 cm×15 cm×10 cmvertical heterogeneity horizontal well. We carried out physical simulation and numerical simulation of horizontal well chemical flooding, and analyzed the oil displacement mechanism and production performance of horizontal well chemical flooding. It is concluded that the direction of horizontal well should be paralleled with the river channel trend, horizontal injection well should be deployed in the high permeability zone and horizontal production well should be deployed in the low permeability zone in plane, horizontal injection well should be deployed in lower location and horizontal production well should be deployed in higher location in vertical, and polymer and surfactant combination flooding is recommended.