The dependence of permeability on direction, or permeability anisotropy in fractured reservoir has been confirmed by many field studies. In practical reservoir simulations, this is accounted for by the introduction of three principal permeabilities and three mutually orthogonal principal axes. This paper investigates whether this is an appropriate approach in analyzing anisotropy of naturally fractured reservoir, which is characterized by heterogeneity and anisotropy due to the fracture’s closure and varied orientation. It is shown that the deformation of the fracture resulted from the change in effective stress may cause the permeability tensor offset an angle to the coordinate axes. Under such circumstance, the conventional simple anisotropy model, which does not consider the cross permeability effect, could result in significant error in interpreting the well response. This paper also studies the stress-displacement behaviour of the fracture and presents a non-linear model, which can be used to well describe the closure process of the fracture under changes in effective stress. Finally, a comprehensive coupled model is proposed to carry out the coupling analysis of the geomechnical-reservoir model. The proposed model has the advantage of enabling the full permeability tensor and non-linear deformation property of the fracture to be taken into account.