The Menefee Formation is the oldest exposed unit of the Mesa Verde Group within the main body of the canyon and shows an upwards transition from fluvial sandstone and shale to carbonaceous shale, coal, and interbedded sandstones as it approaches the contact with the Cliff House Formation. The Menefee Formation is visible in Chaco Canyon as a slope forming unit that underlies the steep mesa walls of the more resistant Cliff House Sandstone. It is especially prominent on the south side of the canyon, with a number of excellent exposures visible on Fajada Butte.
The Menefee Formation is interpreted to have been formed from sediments deposited on a deltaic coastal plain by rivers flowing north and east across New Mexico toward the retreating sea. At the edge of the sea, the streams meandered through a wide, flat, coastal plain with deltas, shallow swamps, and lagoons accumulating plant material which would eventually form thin coal beds.