Abstract: In this paper, the relationships among extension, volcanism and magmatism in extensional basins are expounded. On this basis, the theoretical basis and major contents of the volcanic rock REE inversion technology in the study of extensional basin dynamics are introduced, and the main approaches and parameter selection during the volcanic rock REE inversion course are listed. Compared with positive methods, the inversion technology has greathy decreased dependence on initial models. This advantage assures its efficiency and reliability. The application of this technology can provide important parameter restriction on extentional factor, potential temperature, the thickness of molten mass, the initial thickness of lithosphere, etc. to the study of extensional basin dynamics, and has broad prospects.