A composite nitrogen huff and puff method for a bounded fault block reservoir comprises: selecting the reservoir to be developed, wherein the reservoir to which the development method is applicable is roughly screened according to the following conditions: the reservoir is a bounded fault block reservoir, buried depth 0.5, reservoir thickness>10 m, horizontal permeability>100 mD, vertical permeability to horizontal permeability ratio>0.35, reservoir porosity>0.20, and stratigraphic dip>8°; and sequentially performing the following huff and puff phases: a nitrogen huff and puff phase, a nitrogen and water composite huff and puff phase, a nitrogen and foaming agent composite huff and puff phase, and a nitrogen and carbon dioxide composite huff and puff phase.