The Bight Basin formed within a tectonic framework dominated by the break-up of eastern Gondwana and is one of a series of Mesozoic to Cainozoic depocentres that developed along Australia's southern margin.

The basin was initiated during a period of Middle-Late Jurassic to Early Cretaceous upper crustal extension. This extension represented the failed arm of a triple junction, with the other arms of the system along the incipient rifts between India and Antarctica and India and Western Australia. A northwest-southeast to north-south extension direction superimposed on east-west and northwest-southeast oriented basement structures resulted in oblique to strongly oblique extension and the formation of an echelon half graben in the Eyre, inner Recherche, eastern Ceduna and Duntroon Sub-basins.

The extent of early extensional structures beneath the thick Ceduna Sub-basin cannot be determined at present, however, the anomalously thick nature of the sub-basin may indicate that Jurassic-Early Cretaceous rifts are present at depth. Post-rift thermal subsidence was followed by a phase of accelerated subsidence, which commenced in the Late Albian and continued until continental break-up in the Late Santonian-Early Campanian. During this phase of enhanced subsidence, the dominant structural feature was a system of gravity-driven detached extensional and contractional structures, which formed in the Cenomanian as a result of deltaic progradation.

Evidence for upper crustal extension during this period is limited to Turonian-Santonian extensional faulting in the Ceduna Sub-basin and the reactivation and propagation of Cenomanian growth faults. The commencement of seafloor spreading at about 83 Ma was followed by a further period of thermal subsidence and the progradation of a large sandy deltaic system.