The Paleocene-Eocene "Zona Glauconítica" of the Chilean Magallanes Basin contains an important tight-gas reservoir in the Arenal Block, where it represents the lower part of the unit (40-50 m thick) and the most prolific Tertiary gas reservoir in the Tierra del Fuego Province. This work focuses on the impact of lithofacies, stratigraphy and diagenesis on reservoir quality based mainly on the analysis of well log, drill core, thin-section and XRD/XRF data from exploration wells and complemented with 3D seismic data and previous investigations. Three new U-Pb ages from detrital zircons are also included. The reservoir lies unconformably above Cretaceous rocks and beneath the Eocene section of the "Zona Glauconítica". It represents middle- to outer-shelf deposits and is divided into two parts separated by an important discontinuity surface. The lower one, of Danian-(?)Selandian age, comprises green-grainrich tuffaceous to lithofeldspathic mudrocks and wackes. The upper one is Thanetian in age and is dominated by tuffaceous mudrocks and wackes with lesser green grains. Compaction and local calcite cementation and detrital clay content were the main porosity-reducing factors during earlier burial. In contrast, development of authigenic chlorite and dissolution/leaching out of labile/chloritic grains were the main porosity-enhancing processes during advanced burial. Polygonal faults and some important discontinuity surfaces in the reservoir may have served as barriers and/or pathways for fluid flows during burial. An understanding of the spatial variability of these characteristics is crucial to reduce exploration risk and to improve well planning in the area.