Abstract: The construction of underground oil storage facility with water-curtaining is characterized by large investment, lack of mature design and construction specifications and many uncertain factors, which will induce risks for the construction. It is very important to assess the risks involved in the construction of such facilities. In this study, the risk assessment is performed for both the stability and containment properties for the facilities, which are the critical concerns. The assessment results are compared with the practical experience in the first large underground oil storage facility in China. The risk sources for the stability and containment properties are identified. A survey on the significance and probability of risk resources is performed. Using the fuzzy mathematical theory, the fuzzy weight set of each risk source and fuzzy evaluation set are obtained, and the rating of the influence of each risk source is determined. The typical accidents of instability and loss of containment property during construction of Huangdao underground oil storage facility are introduced. The causes of the accidents are analyzed and compared with the risk sources rating results. The research can be helpful for the risk management and mitigation for such facilities and for enriching the assessment methods and scope of underground engineering risk assessment.