The Delaware basin is the western major structural subdivision of the Permian basin of west Texas and New Mexico, with an area of more than 13,000 mi² (33,500 km²) and containing a volume of 40,000 mi³ (170,000 km³) of Phanerozoic sedimentary rocks. Its history as a separate basin dates from the Early Carboniferous, but its roots began in the late Proterozoic Era, probably as a north-south-trending aulacogen.

Through much of the Paleozoic Era, the basin and its predecessors formed a confined depression surrounded by carbonate shelves. In this depression, organic debris was preserved. Burial converted this material to kerogen and then to hydrocarbons. Deposition of thick evaporite strata during the Late Permian formed a seal that preserved the hydrocarbons and facilitated their migration to porous carbonate reservoirs in the surrounding shelves. In the basin, deeper burial caused conversion of heavier hydrocarbons into gas in the older rocks, whereas paraffinic oils in younger strata accumulated in smaller reservoirs. Apparently, there were three chief intervals of hydrocarbon generation in the basin: (1) Middle Ordovician, Late Devonian, and Mississippian; (2) Middle Pennsylvanian; and (3) Early and middle Permian.

The accumulations of gas and oil in the basin have been largely undisturbed by the mild tectonic activity since the end of the Permian. The region was practically unaffected by the Laramide deformation. Thus, it remains an important oil- and gas-producing province.