The Rio de Chelly rises near the Chuska Mountains close to the Arizona-New Mexico line and winds a tortuous course westward emptying into the Chinle Wash just west of the monument. Except for the last few miles, the Rio de Chelly and its tributaries are enclosed by vertical-walled canyons which range in depth from about 1,000 feet to only 30 feet at the mouth of Canyon de Chelly proper.

The streams of this region flow during the rainy seasons and during the spring runoff of mountain snows; at other times they are dry. Sandstones, chiefly the De Chelly formation of Permian age, laid down more than 200 million years ago, compose the canyon walls. The reddish hue of the cliffs varies in intensity with the time of day.