Abstract: During the drilling process in fractured formations, the issue of lost circulation is severe, which can easily lead to reduced productivity and drilling safety accidents. To address this, the differences in physical properties between drilling fluid and natural gas, coupled flow between matrix and fractures, and the dynamic evolution of fracture opening were comprehensively considered, and the lost circulation prediction model for fractured gas reservoirs with a gas and liquid two-phase flow was established. The accuracy of the model was verified by comparing it with experimental data. Based on this model, the influence of geological structure, matrix parameters, fracture parameters, and bottom-hole pressure difference on lost circulation was analyzed. Furthermore, the traditional statistical lost circulation model was refined, and a method of lost circulation rate characterization suitable for fractured gas reservoirs was provided. The results indicate that the lost circulation rate increases logarithmically with the increase in fracture width, showing a growth trend of first accelerating and then slowing down. It increases linearly with the increase in bottom-hole pressure difference and fracture length. However, for fractured gas reservoirs with developed faults, the lost circulation rate increases exponentially with the increase in fracture width and bottom-hole pressure difference and decreases logarithmically with an increase in the distance between the wellbore and fault. The research results provide a theoretical basis for improving the lost circulation law of fractured gas reservoirs and optimizing the technology of lost circulation prevention and plugging.