Since the 1970s, the largest oil and gas reservoirs have been discovered in the Permian–Early Triassic formations in Saudi Arabia. Thus, this time period is important for the discovery of new oil reserves in Iran. The Arabian passive continental margin has undergone lithospheric extension during the Permian–Triassic, which led to the formation of the Neo-Tethys. The aim of this paper is to describe the development of the continental rift basin in the Zagros region based on the tectono-sedimentological evolution. We have studied well-log data to specify the distribution of synrift deposits in the Zagros and have related this information to the modelling. Environmental changes indicated by various sedimentary sequences, from a siliciclastic basin to a carbonate platform setting, are described. The Cambrian Hormuz salt, which overlies the metamorphosed Precambrian basement, becomes effective as a basal detachment layer influencing the style of overburden deformation during the Permian–Triassic extension event. We have investigated the formation of various structures linked to the presence or absence of the Hormuz layer by analogue modelling and relating these structures to the Late Palaeozoic sedimentation. Based on results of the analogue modelling, we argue that the basal detachment layer (Hormuz series) has contributed to the various structural styles of the extensional basin development in the Fars domain and the Lorestan domain.