The canyon was formed by the Prairie Dog Town Fork of the Red River which winds along the relatively flat Caprock of West Texas. Water erosion over the millennia has been aided by wind erosion to shape the canyon's geological formations.
Notable canyon formations include caves and hoodoos.
The painter Georgia O'Keeffe who lived in nearby Amarillo and Canyon early in the 20th century, wrote of the Palo Duro: "It is a burning, seething cauldron, filled with dramatic light and color.
The first European explorers to discover the canyon were members of the Coronado expedition, who visited the canyon in 1541. Apache Indians lived in Palo Duro at the time, but they were later displaced by Comanche and Kiowa tribes, who had the advantage of owning horses brought over by the Spanish. They had contact with traders in nearby New Mexico, called Comancheros.
A United States military team under Captain Randolph B. Marcy mapped the canyon in 1852 during their search for the headwaters of the Red River. The land remained under American Indian control until a military expedition led by Colonel Ranald S. Mackenzie was sent in 1874 to remove the Indians to reservations in Oklahoma. In a lucky coup, the Mackenzie expedition was able to capture thousands of the Indians' horses and destroy them in nearby Tule Canyon. Demoralized and denied their main weapon and source of livelihood, the Comanche and Kiowa conceded and left the area.
Soon after, in 1876, Charles Goodnight established the JA Ranch in Palo Duro Canyon. Over the next half century, the canyon remained in private hands, but was an increasingly popular tourist spot for local residents. In 1934, the upper section of the canyon was purchased by the State of Texas and turned into the Palo Duro Canyon State Park. Amarillo is the largest city adjacent to Palo Duro Canyon State Park.
In the Frontiersman Camping Fellowship of Royal Rangers, the West Texas District is known as the Palo Duro Chapter because of the importance of the canyon in the history of the region.
Palo Duro Canyon itself was downcut by the Prairie Dog Town Fork of the Red River during the Pleistocene, when the whole region was uplifted. Most of the strata visible in the Canyon were deposited during the Permian and Triassic periods. From oldest to youngest, the formations are as follows:
See also: Ogallala Aquifer