A gelled foam is comprised of water, a foaming agent (surfactant), a foaming stabilizer (polymer) and a cross-linking agent. This system with gel as the outer phase is more stable than conventional foam that uses water as the outer phase. Therefore, the gelled foam system prolongs the effective period of water shutoff. By using the Ross Foamer Device to determine its foaming and stability characters, we verify that the best foaming agent is 0.3% YG240; the stable foam agent is 0.2 - 0.4% HPAM; the cross-linking agent is 0.09% sodium dichromate and 0.16% sodium sulphite and nitrogen. On the basis of bench-scale evaluations of characters on gelation time and water shutoff efficiency, the pilot test is performed on Well H1340 in the Huoshaoshan fractured reservoir. The workover program includes washing the larger fissures using a highly efficient oil displacement agent, injecting gelled foaming agent, over-displacing fluids, nitrogen and water, then shutting in the well for hardening. Field tests show that good blocking efficiency is gained in the well with a water cut decrease of 20 - 50% and oil production increase of 3.7 - 11.0 m(3)/day.