AbstractSediments deposited into foreland basins can provide valuable insights related to the geological evolution of their hinterlands. Located in the peripheral foreland of the South Sistan Suture Zone (SE Iran), the Karvandar Basin exhibits a several‐kilometer‐thick shallow‐marine to continental clastic sedimentary sequence forming elongated sub‐circular synclines. These synclines overlie a mud‐dominated formation with exotic volcanic blocks that hosts one of Iran's largest mud volcano, known as Pirgel. In this study, we present a ∼3.5‐km‐thick magnetostratigraphic section and U‐Pb zircon ages of interlayered tuffs that constrain a depositional age of the Karvandar Basin of ∼24–17 Ma. Sandstone and microconglomerate framework analyses and paleocurrent directions suggest a first‐cycle active volcanic arc source to the northeast of the basin. We interpret the mud‐dominated lithology with volcanic blocks as an olistostrome originating from a similar source as the overlying clastic sequence. The deposition of the olistostrome is dated at ∼24.5 Ma by a U‐Pb calcite age from a coral block. The absence of large‐scale anticlines and the occurrence of angular unconformities suggest that the sub‐circular synclines in the Karvandar Basin formed by gravity‐driven downbuilding into the unconsolidated fluid‐saturated olistostrome, resembling salt‐related minibasins. Integrated results indicate that a late Oligocene to early Miocene Makran volcanic arc represents the source of the clastic sequence. Hence, our results provide new constraints on the initiation of arc volcanism related to the Makran subduction zone, predating earliest reported ages from the Mirabad pluton (19 Ma) to the northeast of the Karvandar Basin by ∼5 Myr.