The reservoir characteristics and hydraulic flow unit properties of the Khatatba Formation in Qasr field, Western Desert, Egypt have been investigated. Several methods have been used to analyze and characterize the sandstone of the Khatatba Formation. Petrophysical parameters related to porosity and permeability have been considered together with some other important factors: reservoir quality index (RQI), flow zone indicator (FZI), and normalized porosity index (NPI). A study of the petrographic descriptions has been included to interpret the rock types and lithofacies. Moreover, displacement pressure, threshold pressure, and the Winland equation are used to understand and explain the pore geometry and pore throat diameter. Analysis of samples from three different wells indicates that this sandstone can be classified into three rock types with distinctive lithotypes and hydraulic flow units. Rock type I (flow unit-1), representing the data from the Qasr-3 well, possesses the best storage capacity with good porosity and very good permeability (max. value 14%, and 818 mD respectively). Coarse to very coarse grain sandstone is observed while all pore spaces are interpreted as megapores. The highest flow zone indicator has an average value of 15 μm and an average reservoir quality index of 2.08 μm. The capillary pressure and saturation curves show the lowest displacement pressure with a maximum pore throat diameter (Winland r35) of 34 μm, which affirm the presence of mega pores with higher permeability routes. Rock type II (flow unit-2), representing the data from the Qasr-5 well, is the second-best for storage capacity with average FZI and RQI of 6.3 and 1.07 μm, respectively. It is a medium-grained sandstone with very good porosity (max 16.45%), while the permeability is lower than that of type I (max 448 mD). The pore spaces are interpreted as a combination of megapores and macropores, while the max. pore throat radius (r35) is recorded as 17 μm. Data from the Qasr-6 well reveal that this is the poorest quality reservoir (flow unit-3). It comprises fine-grained sandstone with the lowest average porosity and permeability of 9% and 16 mD, respectively. The average FZI and RQI also show lower values of 2.9 and 0.31 μm. Most of the pore spaces have been categorized as macropores with some (a few percent) being categorized as mesopores so that the r35 value shows the lowest of 5.6 μm. It is concluded that the grain size and lithotypes of the sandstone affect the reservoir quality and control the petrophysical properties and hydrocarbon potential.