In Timpoweap Canyon near Hurricane (Utah, USA), spectacular outcrop conditions of Early Triassic rocks document the geometric relationships between a massive Smithian fenestral-microbial unit and underlying, lateral and overlying sedimentary units. This allows us to reconstruct the evolution of depositional environments and high-frequency relative sea-level fluctuations in the studied area. Depositional environments evolved from a coastal plain with continental deposits to peritidal settings with fenestral-microbial limestones, which are overlain by intertidal to shallow subtidal marine bioclastic limestones. This transgressive trend of a large-scale depositional sequence marks a long-term sea-level rise that is identified worldwide after the Permian–Triassic boundary. The fenestral-microbial sediments were deposited at the transition between continental settings (with terrigenous deposits) and shallow subtidal marine environments (with bioturbated and bioclastic limestones). Such a lateral zonation questions the interpretation of microbial deposits as anachronistic and disaster facies in the western USA basin. The depositional setting may have triggered the distribution of microbial deposits and contemporaneous marine biota. The fenestral-microbial unit is truncated by an erosional surface reflecting a drop in relative sea level at the scale of a medium depositional sequence. The local inherited topography allowed the recording of small-scale sequences characterized by clinoforms and short-distance lateral facies changes. Stratal stacking pattern and surface geometries allow the reconstruction of relative sea-level fluctuations and tracking of shoreline migrations. The stacking pattern of these small-scale sequences and the amplitude of corresponding high-frequency sea-level fluctuations are consistent with climatic control. Large- and medium-scale sequences suggest a regional tectonic control.