The basins are down-fallen blocks of crust and the ranges are up-thrusted slabs (actually the arrangement is a bit tilted to the east - in profile this would look similar to an encyclopedia leaning to one side - like so ///). The normal arrangement in the basin and range system is that each valley (i.e. basin) is bounded on each side by a normal fault that runs parallel to the range.
This arrangement is very similar to the horst and grabens seen in divergent plate boundaries such as the Mid-Atlantic Ridge or in failed rifting areas such as the Western Rift of the Great Rift Valley in East Africa. However the extent of the rifting in the Basin and Range is not concentrated into a single valley but is spread out over a very large area creating much smaller grabens laying roughly parallel to each other in a north-south direction (which leads to an excellated rain shadow effect resulting in very dry conditions in this province).
Death Valley is a good example of a modified basin and range valley.
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Geology
This unique topography has formed as the result of extension (literally the Earth's crust is being pulled apart) that is thought to be caused by the effect of the Pacific Plate moving north relative to the North American Plate (this is the same force behind the creation of the San Andreas Fault) and by other forces (see below).
Subsequent to the mountain building episode a large part of the mountain belt created in the Laramide orogeny and previous orogenies (the Sevier, and part of the Nevadan) went through a long period of extention that persists today.
There are several hypotheses trying to explain how the continental crust of North America responded to the great deal of campaction it went through with the Laramide orogeny. There is at least some evidence to support all of these ideas but it is very possible that more than one is correct: