To gain a better understanding of the enhanced shale gas recovery by CO2 gas injection (CO2-ESGR) technique, the dynamic displacement mechanism of CO2–CH4, the CO2 enhanced shale gas recovery (), and CO2 storage capacity () were studied based on transport properties of CO2 and CH4. Experiments of CO2 injection into shale gas reservoir preadsorbed by CH4 were performed in a fixed bed. Breakthrough curves were obtained under different test conditions and simulated by one-dimension advection-dispersion (AD) model. It was found that dispersion coefficient (K1) rather than molecular diffusivity of CO2 dominated its transport in shale. K1 together with advection velocity (υ) of CO2 during CH4 displacement controls and . When transporting in shale gas reservoir, CO2 had larger dynamic adsorption amount and υ, but smaller K1 than CH4. The competitive transport and adsorption behavior of CO2 and CH4 made it possible for CO2 to store in shale reservoir and to drive the in-place CH4 out of shale reservoir. The transfer zone of CO2–CH4 displacement (CCD) was very wide. High and were reached at low injection CO2 gas pressure and for small shale particles. Higher injection flow rates of CO2 and temperatures ranging from 298 K to 338 K had a little effect on and . For field conditions, high CO2 injection pressure has to be used because the pore pressure of shale reservoir and adsorption amount of CH4 increase with the increase in depth of shale gas reservoir, but is still not high.