The main features of continental rift are mantle upwelling, extension, thinning, faulting and subsidence of lithosphere. The extensional environment is necessary and key to form a continental rift. It has been considered by the Chinese geologists in the past that the Panxi (Panzhihua-Xichang) rift is marked mainly by layer complexes, Emeishan basalts,ring alkalic complexes and sedimentation of the rift basins in the late Triassic. Recently, a series of studies have shown that this huge magmatic event from the Variscan to the Indosinian is a product of mantle plume-lithosphere interaction. Analysis of sedimentation and structures on the western margin of the upper Yangtze block demonstrates that the Panxi area is an old land and was eroded from late Permian to middle Triassic. The late Triassic molasses formation in faulted basins is caused by foreland loading and strike-slip exerted by the Tethys closure, and no narrow rift basin existed. This paper presents questions about the existence of the Panxi rift based on magmatic activities, sedimentary processes, structural features and geophysical data, and proposes a geological evolution history of the Panxi area from Paleozoic to Mesozoic.