The Laramie Basin formed during the Laramide orogeny, from the Late Cretaceous to middle Paleocene. The pre-Laramide sedimentary rocks along the flanks of the basement-cored Medicine Bow Mountains have been extensively folded and faulted. Less deformation is observed on the eastern margin where these same sedimentary rocks are tilted and rest unconformably on the 1,432–1,436 Ma Laramie Anorthosite Complex (Frost and others, 2013) or the 1,433 Ma Sherman Granite (Frost and others, 1999) further to the south.

Similar to in other Laramide basins, oil and gas in the Laramie Basin is commonly found in asymmetric anticlinal traps that occur in the northern half of the basin. One exception is a stratigraphic trap in the Muddy Sandstone of the Big Hollow field (Pritchett, 1985). Oil-producing formations in the basin include the Pennsylvanian Tensleep Sandstone, the Lower Cretaceous Muddy Sandstone, and the Lakota (Cloverly) Formation. Minor oil production has also come from the Jurassic Sundance and Upper Cretaceous Wall Creek formations. The most productive natural gas reservoirs in the Laramie Basin are the Lakota (Cloverly) Formation and Muddy Sandstone in the Rock River field, and the Shannon Sandstone Member of the Upper Cretaceous Cody Shale in the Dutton Creek field.