The Rocky Mountains were uplifted in many pulses of deformation between 70 to 40 million years ago. Sediments from the uplifting mountains were initially deposited near the mountains and then later transported by rivers eastward onto what eventually became the Great Plains. This river-borne silt was accompanied by wind-borne volcanic ash from eastern Nevada and western Utah, and the fine grained ash rich sediments were deposited in vast sheets called the White River beds. The earliest documented bedrock at Agate dates to the Oligocene Epoch, 34 million years ago, but most of Agate's Oligocene deposits are well buried beneath later Miocene deposits. Oligocene beds are well exposed at Badlands National Park, 130 miles northeast of Agate.
During the early Miocene Epoch, beginning about 25 million years ago, streams in the area that now includes Agate Fossil Beds National Monument shifted and cut down to produce valleys. These valleys were later filled in with sediments as the Great Plains continued to build up or aggrade. Aggradation resulted in the formation of wide savannas during the Miocene, those savannas being dotted with small water holes and the whole landscape populated with herds of animals (e.g., chalicotheres, rhinoceroses, entelodonts, beardogs, land beavers, camels, horses, pocket gophers). Ongoing research is documenting the grass species present on the ancient savanna. A major drought occurred in the Agate area during the Early Miocene. It is believed that when many of the drought-stricken and exhausted animals came to the remaining water holes in an effort to survive, the animals collapsed and died in and around the water. As the muddy water dried, the fossil beds were formed. Agate's older fossil layer is about 21 million years old and covered by a layer of ash, and its younger bed is 20 million years old. These layers are in what are now called the Harrison, Anderson Ranch, and Marsland Formations.