Caliche  forms where annual precipitation is less than  per year and the mean annual temperature exceeds . Higher rainfall leaches excess calcium completely from the soil, while in very arid climates, rainfall is inadequate to leach calcium at all and only thin surface layers of calcite are formed. Plant roots play an important role in caliche formation, by releasing large amounts of carbon dioxide into the A horizon of the soil. Carbon dioxide levels here can exceed 15 times normal atmospheric values. This allows calcium carbonate to dissolve as bicarbonate. Where rainfall is adequate but not excessive, the calcium bicarbonate is carried down into the B horizon. Here there is less biological activity, the carbon dioxide level is much lower, and the bicarbonate reverts to insoluble carbonate. A mixture of calcium carbonate and clay particles accumulates, first forming grains, then small clumps, then a discernible layer, and finally, a thicker, solid bed.
However, caliche also forms in other ways. It can form when water rises through capillary action. In an arid region, rainwater sinks into the ground very quickly. Later, as the surface dries out, the water below the surface rises, carrying up dissolved minerals from lower layers. These precipitate as water evaporates and carbon dioxide is lost. This water movement forms a caliche that is close to the surface. Caliche can also form on outcrops of porous rocks or in rock fissures where water is trapped and evaporates. In general, caliche deposition is a slow process, requiring several thousand years.
The depth of the caliche layer is sensitive to mean annual rainfall. When rainfall is around  per year, the caliche layer will be as shallow as . When rainfall is around  per year, the caliche layer will be at a depth of around . The caliche layer disappears complete in temperate climates if annual rainfall exceeds .
The source of the calcium in caliche may be the underlying bedrock, but caliche can form even over bedrock that is not rich in calcium. This is attributed to calcium brought in as aeolian dust.