The Oligocene–Miocene Kailas Formation is exposed along strike for ∼1300 km within the southernmost Lhasa terrane. In this study, we documented the sedimentology, structure, and age of this unit exposed between 87°E and 90°E. Within this region, the Kailas Formation is composed of continental deposits dominated by conglomerate and sandstone, with lesser volumes of siltstone and paleosols. These rocks were deposited nonconformably on Gangdese Batholith and related volcanic rocks along their northern boundary, whereas to the south, the south-dipping Great Counter Thrust places them in contact with Xigaze forearc and mélange units. We interpret the Kailas Formation to have been deposited in alluvial-fan and fluvial environments with sediment principally derived from the north. Based on sedimentology and structural relationships, we interpret these rocks to have formed in a north-south extensional setting. New zircon U-Pb ages from volcanic tuffs and flows show that Kailas Formation deposition is younger to the east: Deposition occurred between 26 Ma and 24 Ma in western Tibet (81°E), at 25–23 Ma north of Lazi (87.8°E), at 23–22 Ma near Dazhuka (89.8°E), and as late as 18 Ma southwest of Lhasa (92°E). Overall, basin development propagated eastward at a rate of ∼300 mm/yr. This pattern and rate of propagation are similar to that of the temporal-spatial distribution of adakitic and ultrapotassic magmatism within the Lhasa terrane to the north, which has been interpreted as a record of slab breakoff. Magmatism lags several million years behind Kailas basin development at most locations. We interpret the Kailas basin to have formed as the result of Indian slab shearing and breakoff, which began in western Tibet around 26 Ma and reached eastern Tibet by ca. 18 Ma.