The mathematical model of Two-Phase flow of water and gas in aquifer is established based on the Darcy linear percolation law and law of conservation of mass of fluid mechanics. According to the fully implicit difference method, time and spatial discretization of the model lead to a set of nonlinear equations, which can be transferred into a group of linear equations. The linear equations can be solved using the Jacobi-iteration pretreatment because of its high stability and fast convergence speed of the solution positively. The distribution of the saturation and formation pressure with time in the process of gas injection is analyzed by using the mathematical model. The results show that the gas saturation increases with the gas injection rate, the permeability and reservoir thickness increasing whereas the formation pressure increases slowly under same cumulative gas injection rate. The formation pressure increases at first and then decreases to reach a steady value.