The Tambach Formation mainly lies within a basin currently occupied by the Thuringian Forest, and it is stratigraphically younger than the Rotterode Formation and older than the Eisenach Formation. It is the oldest part of the Thuringian Forest Basin's Upper Rotliegend succession, a name referring to a sequence of purely sedimentary rocks in the Lower Permian of Germany. The sediments of the Tambach Formation were deposited in a small Permian graben (termed the Tambach Basin), which was oriented in a northeast to southwest direction and incised into the igneous and sedimentary rocks of the Rotterode Formation. The Tambach Basin would have about 250 square km during the Permian, though modern outcrops only occupy about 50 square km, not counting the northeastern portion of the basin which has had its deposits erased by later geological processes.