Water-flooding is a widely used recovery method of mature oilfields. In recent years, most of the mature oilfields are already at the medium-high even ultra-high water cut period due to water breakthrough and invalid water circulation. Air foam injection has been optioned as an EOR technique to block high permeability water zones and/or increase sweeping and displacement efficiency. There are medium-high average permeability (1016×10-3μm2) oil bearing formations and ultra high permeability layers or channels after water flooding in Dagang oilfield, Petrochina. After 42 years of water injection, the recovery efficiency achieved was only 37.6%, but average water cut has reached to over 97%. In this study, Laboratory experiments were focused on low-temperature-oxidation (LTO) characteristics of oil samples, selection and evaluation of the foam agent and core foam-flooding. Through isothermal oxidation experiments, the influence of formation sand, formation water, foams, clay mineral, temperature and pressure on LTO reactions is investigated qualitatively. It is also analyzed that the changes of component and properties of crude oil before and after the LTO reaction. Selection and evaluation of basic property of the foam agent on formation condition has been done through the device of high temperature and high pressure foam agent evaluation. After that, some dynamic foam displacement experiments are also performed, including single-tube and parallel tubes displacement experiments of air foam at different water saturations. Experiments prove that during the air foam flooding process, oxygen can be effectively consumed in the formation, and the foam can effectively plug high permeability layers to expand swept volume. A pilot project has been designed according to the study in Dagang oilfield. The issues related to safety and corrosion control during air injection and the project economic assessment were also addressed in this paper.