Sandstones are clastic in origin (as opposed to either organic, like chalk and coal, or chemical, like gypsum and jasper). They are formed from cemented grains that may either be fragments of a pre-existing rock or be mono-minerallic crystals. The cements binding these grains together are typically calcite, clays and silica. Grain sizes in sands are in the range of 0.1 mm to 2 mm . Clays and rocks with smaller grain sizes, including siltstones and shales, are typically called argillaceous sediments; rocks with larger grain sizes including breccias and conglomerates are termed rudaceous sediments.

Red sandstone interior of Lower Antelope Canyon, Arizona, worn smooth by erosion from flash flooding over millions of years.The formation of sandstone involves two principal stages. First, a layer or layers of sand accumulates as the result of sedimentation, either from water (as in a river, lake, or sea) or from air (as in a desert). Typically, sedimentation occurs by the sand settling out from suspension; i.e., ceasing to be rolled or bounced along the bottom of a body of water (e.g., seas or rivers) or ground surface (e.g., in a desert or sand dune region). Finally, once it has accumulated, the sand becomes sandstone when it is compacted by pressure of overlying deposits and cemented by the precipitation of minerals within the pore spaces between sand grains.

The most common cementing materials are silica and calcium carbonate, which are often derived either from dissolution or from alteration of the sand after it was buried. Colors will usually be tan or yellow (from a blend of the clear quartz with the dark amber feldspar content of the sand). A predominant additional colorant in the southwestern United States is iron oxide, which imparts reddish tints ranging from pink to dark red (terracotta), with additional manganese imparting a purplish hue. Red sandstones are also seen in the Southwest and West of England and Wales, as well as central Europe and Mongolia. The regularity of the latter favors use as a source for masonry, either as a primary building material or as a facing stone, over other construction.

The environment where it is deposited is crucial in determining the characteristics of the resulting sandstone, which, in finer detail, include its grain size, sorting and composition and, in more general detail, include the rock geometry and sedimentary structures. Principal environments of deposition may be split between terrestrial and marine, as illustrated by the following broad groupings