It is geologically considered part of the Rio Grande Rift zone, which widens there due to the slight clockwise rotation of the Colorado Plateau tectonic plate.
Notable features of the basin include White Sands National Park, Oliver Lee Memorial State Park, the Carrizozo Malpais lava flow, Holloman Air Force Base, and the White Sands Missile Range with the historic Trinity nuclear test Site.
The basin is closed to the north by Chupadera Mesa and to the south by the broad flat 4000-foot-elevation plain between the Franklin and Hueco Mountains, with the conventional boundary taken to be the New Mexico–Texas border.
To the north of Lake Lucero are extensive alkali flats, which produce additional gypsum for wind deposition on the dunes.
Under US military protection, the first permanent settlement was established in 1862, when about 50 Hispanic farmers from the Rio Grande Valley moved to Tularosa.
When the Americans first started running cattle, in some places, the native perennial bunchgrasses grew 'as high as a horse’s shoulder' - 1.0–2.5 m (3.3–8.2 ft) depending on species.
Many areas that were historically known to be rich perennial grasslands are now xeric desert shrublands, with creosote bush—(Larrea tridentata) predominating.