The first fossils of Azendohsaurus laaroussii were discovered in a northern part the Argana Formation (also known as the Timezgadiouine Formation) in Morocco, part the Argana Basin near the Atlas Mountains. The fossil beds consist of sandstones and red clay mudstones, and were excavated by Jean-Michel Dutuit between 1962 and 1969. The fossils of A. laaroussii are known from only a single layer within the formation, in an outcrop numbered XVI by Dutuit at the base of the T5 (or Irohalene) member. The T5 member has traditionally been roughly dated to the early Late Triassic in age using vertebrate biostratigraphy based on the presence of the phytosaur Paleorhinus magnoculus, as part of the Carnian dated 'Palaeorhinus biochron', although this method of correlating and dating global Triassic sequences may be inaccurate and the date for the T5 member remains uncertain.