Grand Falls formed as a result of lava flows from Merriam Crater damming the Little Colorado River about 25,000 years ago. The river cut a path around the lava flow causing the waterfall to form. The relief at Grand Falls is greater than that observed at Niagara Falls on the U.S.-Canada border.
The Little Colorado River is an ephemeral stream, so the falls are mostly active during the spring melt or following summer monsoon storms.