Paleogeographic reconstructions for Oregon and Washington during Paleogene time illustrate a major transition from a dominantly compressional (prior to middle Eocene time) to an extensional tectonic regime. This transition resulted in the development of three phases of Paleogene basin evolution in the United States Pacific Northwest. During the initial phase, basins formed along the continental margin during collision of oceanic islands. Sediments in these basins were derived from nearby orogenic highlands. The second phase of basin development began in middle Eocene time and consisted of rapid subsidence of individual basins that formed within a broad forearc region. Nonmarine basins that formed during this phase were caused by extension possibly associated with transcurrent faulting. Rapid sedimentation in both marine and nonmarine basins during this time consisted dominantly of sandstone derived from Cretaceous plutonic sources far to the east. The final stage of basin development was the modification of previous basin configurations by the growth of the Cascade volcanic arc, which was initiated in early Oligocene time. The rising Cascade Range diverted streams carrying eastern-derived material, thereby reducing overall sedimentation rates in the coastal basins and providing a local source of volcanic detritus.