Seismic characterization of carbonate reservoirs is a challenging task for geophysicists because of their special depositional environment and complex interior structures. We developed a case study of the seismic characterization of a karstified carbonate reservoir in the Tarim Basin, western China. The characterization procedure is sequential and includes fault and fracture detection, seismic facies classification, seismic impedance inversion, and lithofacies classification. We presented a dip-steered coherence algorithm for detecting faults and karst fractures in the carbonate reservoir. Incorporating the dip information improves the performance and robustness. We applied normalized seismic segments, rather than the amplitude values, as the input to seismic facies classification, so as to reduce the impact of strong amplitudes, such as karst fractures, and to enable the analysis of weak amplitudes in the background strata. For the impedance inversion, we adopted a Fourier integral method for fast simulation in the stochastic inversion in this karstified carbonate reservoir. The algorithm honors the lateral variation based on the seismic trace similarity, instead of the lateral variogram that is commonly used in stochastic inversion. We conducted lithofacies classification, in which we used seismic coherence as a prior knowledge, so as to honor the fracture-associated local lithofacies with dolomitization and to distinguish it from limestone without dolomitization. Based on reservoir characterization described above, we determined three drilling wells for potential oil/gas exploration.