Indirectly, the origin of KREEP is a result of the Moon's origin, which is now commonly believed to be a result of a Mars-sized object that impacted the Earth 4.5 billion years ago (see Giant impact hypothesis). This impact put a large amount of material into circumterrestrial orbit that ultimately reaccreted to form the Moon. Given the large amount of energy that was liberated in this event, it is predicted that a large portion of the Moon would have initially been molten, forming a near-global magma ocean. As crystallization of this magma ocean proceeded, minerals such as olivine and pyroxene would have precipitated and sunk to form the lunar mantle. After crystallization was about three-quarters complete, anorthositic plagioclase would have begun to crystallize, and because of its low density, float, forming an anorthositic crust. Importantly, elements that are incompatible (i.e., those that partion preferentially into the liquid phase) would have been progressively concentrated into the magma as crystallization progressed, forming a "KREEP"-rich magma that initially should have been sandwiched between the crust and mantle. Evidence for this scenario comes from the highly anorthositic composition of the lunar highland crust, as well as the existence of KREEP-rich materials.
Before the Lunar Prospector mission, it was commonly thought that KREEP-rich materials would have formed a near global layer beneath the crust. However, results from the gamma ray spectrometer on this mission show that KREEP-containing rocks are primarily concentrated within the region of Oceanus Procellarum and Mare Imbrium, a unique geological province that is now known as the Procellarum KREEP Terrane. Basins far from this province that excavated deep into the crust (and possibly mantle) such as the Crisium, Orientale, and South Pole-Aitken show only modest, or no, enhancements of KREEP within their rims or ejecta. The enhancement of heat producing elements within the crust (and/or mantle) of the Procellarum KREEP Terrane is almost certainly responsible for the longevity and intensity of mare volcanism on the nearside of the Moon.