This work investigates the performance of dispersed particle gel (DPG) by core flow tests including injectivity, selective plugging, thermal stability, and improved oil recovery (IOR). Results showed that the resistance factor is small when DPG was injected, but obviously became larger while turning into brine water flooding. Both the oil and water relative permeability were reduced and greater reduction appeared in water relative permeability. DPG could block water flow without affecting oil flow, and oil–water segregated flow mechanism was proposed to explain this selective plugging. The injection pressure increases, caused by strong plugging due to the DPG aggregation aging in high temperature, which was consistent with the observation of atomic force microscope (AFM) photos. The DPG could effectively block high permeability zone and produce oil from low permeability zone, which could provide a practical way to enhance hydrocarbon recovery while reducing water production for extremely heterogeneous reservoirs.