Together with the Greater Sunda Islands to the west they make up the Sunda Islands. The islands are part of a volcanic arc, the Sunda Arc, formed by subduction along the Java Trench.

They are split into the independent state of East Timor (Timor-Leste) and the Indonesian provinces of Bali, West Nusa Tenggara (Nusa Tenggara Barat) and East Nusa Tenggara (Nusa Tenggara Timur).

The Lesser Sunda Islands consist of two geologically distinct archipelagos. The northern archipelago, which includies Bali, Lombok, Sumbawa, Flores and Wetar, is volcanic in origin. It began to be formed during the Pliocene, about 15 million years ago, as a result of the collision between the Australian and the Asian plates. The islands of the southern archipelago, including Sumba, Timor and Babar, are non-volcanic and appear to belong to the Australian plate. The geology and ecology of the northern archipelago share a similar history, characteristics and processes with the southern Maluku Islands, which continue the same island arc to the east.

There is a long history of geological study of these regions since Indonesian colonial times; however, the geological formation and progression is not fully understood, and theories of the geological evolution of the islands changed extensively during the last decades of the 20th century.