In the process of unconventional natural gas development practice, the “extreme utilization” concept that focuses on “continuously breaking through the limit of development technology” is gradually formed, and supports the scale benefit exploration of unconventional gas in China. On this basis, the development theory of “extreme utilization” is proposed, its theoretical connotation together with development technologies of unconventional natural gas are clarified. The theoretical connotation is that, aiming at “extreme gas reservoirs”, “extreme techniques” are utilized to build subsurface connected bodies, expand the discharge area, and enlarge the production range, to obtain the maximum single-well production, extreme recovery, and eventually achieve the “extreme effect” of production. The series of development technologies include micro/nano-scale reservoir evaluation, “sweet spot” prediction, unconventional percolation theory and production capacity evaluation, optimization of grid well pattern, optimal-fast drilling and volume fracturing, and working regulation optimization and “integrated” organizing system. The “extreme utilization” development theory has been successfully applied in the development of unconventional gas reservoirs such as Sulige tight gas, South Sichuan shale gas, and Qinshui coalbed methane. Such practices demonstrate that, the “extreme utilization” development theory has effectively promoted the development of unconventional gas industry in China, and can provide theoretical guidance for effective development of other potential unconventional and difficult-to-recovery resources.