The first Ancestral Pueblo were nomadic foragers whose economy relied upon hunting and gathering wild foods. When they became sedentary and began to cultivate corn (maize), they also began to build circular pits as storage bins. Later they reinforced the bins with stone walls and covered them with roofs, and some individuals began to use the structures as homes. Once they had developed farming techniques adequate to the arid climate and were able to live completely on the corn, squash, beans, and cotton they grew, the Ancestral Pueblo established permanent communities and began to build their houses aboveground.

Cliff dwellings are the culmination of these architectural developments; the use of hand-hewn stone building blocks (the principal construction material) and adobe mortar was unsurpassed even in later buildings. Ceilings were built by laying two or more large crossbeams and placing on them a solid line of laths made of smaller branches. The layers were then plastered over with the same adobe mixture frequently used as mortar. Edifices several stories high were built with each succeeding story set back from the one below, creating a row of terraces on each level and giving the structure a stepped appearance.

Residential rooms measured about 10 by 20 feet (3 by 6 metres). Entrance to ground-floor rooms was by ladder; people used the ladder to climb to the roof of the room and then descended into the room through an opening cut into its ceiling; rooms on upper floors could be entered by doorways from adjoining rooms and by additional roof/ceiling entrances. Each community had two or more kivas (kiva), or ceremonial rooms, usually round in early times but later square.

Although earlier Ancestral Pueblo villages were built in the open, these people began to build cliff dwellings about 1150, perhaps as a defense against invading groups of ancestral Navajo and Apache. In addition to the natural protection provided by a cliff, the absence of doors and windows to the rooms on the ground floor left a solid outer stone wall that could be surmounted only by climbing a ladder; ladders could easily be removed if the town were attacked. Many smaller communities joined together to form the large towns built beneath the cliffs. Two of the largest, the Cliff Palace at Mesa Verde National Park in Colorado and the five-story Pueblo Bonito in New Mexico, probably had about 150 and 800 residential rooms, respectively.

As the 13th century ended, the Ancestral Pueblo abandoned the cliff dwellings for other sites. An examination of tree trunks from that period using dendrochronology indicates that a severe drought occurred in the region between 1276 and 1299. Often referred to as the Great Drought, this climatic event probably occasioned crop failures and shortages of drinking water, creating difficulties in provisioning the concentrated population living in the cliff dwellings.