The Permian Cutler Group was deposited in and around the Paradox Basin at tropical (approximately 10^o north) latitudes. The Paradox Basin is a foreland basin that formed between the southwest side of the Uncompahgre Uplift segment of the Ancestral Rocky Mountains and the western shoreline of Pangea. The Cutler Group mainly consists of clastic sedimentary rocks that were derived from two distinct source areas: the Uncompahgre Uplift located to the east of the Paradox Basin, and the marine shelf, located to the west. When sea level was high, Uncompahgre-derived feldspar- and mica-rich sediments were deposited in extensive low-gradient fluvial, floodplain, and tidal mudflats across much of the Paradox Basin. At the same time, limestones and quartz-rich sands were deposited on the marine shelf. When sea level was low, the marine shelf was subaerially exposed, and shelf sediments were reworked and transported southeastward by on-shore winds into the Paradox Basin, where they were deposited as eolian dunes and sandsheets.

The stratigraphy of the Cutler Group indicates the climate in the Paradox Basin region was relatively more arid when sea level than was low than when sea level was high. A similar relation between climate and sea level has been documented for tropical latitudes during the Quaternary. Although Quaternary cycles of sea-level and tropical climate change were on the order of 10⁴-10⁵ years, stratigraphy of the Cutler Group suggests cycles of sea-level and climate change can be linked at time scales on the order of 10⁶–10⁷ years. The stratigraphy of the Cutler Group also indicates changes in climate-controlled rates of sediment supply can locally match rates of relative sea-level change at the scale of 3^rd-order depositional sequences.