This study investigated the impact of formation water on the mass transfer between CO2 and crude oil in low-permeability reservoirs through CO2 miscible flooding. Formation water leads to water blocks, which affect the effectiveness of CO2 miscible flooding. Therefore, we studied the impact and mechanisms of formation water on the CO2-oil miscibility. The microscale interaction between formation water-CO2-core samples was investigated using CT scanning technology to analyze its influence on core permeability parameters. In addition, CO2 miscible flooding experiments were conducted using the core displacement method to determine the effects of formation water salinity and average water saturation on minimum miscibility pressure (MMP) and oil displacement efficiency. The CT scanning results indicate that high-salinity formation water leads to a decrease in the porosity and permeability of the core as well as pore and throat sizes under miscible pressure conditions. The experimental results of CO2 miscible flooding demonstrate that CO2-oil MMP decreases as the salinity of the formation water increases. Moreover, as the average water saturation in the core increases, the water block effect strengthens, resulting in an increase in MMP. The recovery factors of cores with average water saturations of 30%, 45%, and 60% are 89.8%, 88.6%, and 87.5%, respectively, indicating that the water block effect lowers the oil displacement efficiency and miscibility.