Red Canyon is a shallow valley in the side of the Paunsaugunt Plateau surrounded by much exposed, orange red sandstone. The rocks are eroded into the familiar pinnacles, spires, columns and hoodoos also found in Bryce National Park a few miles to the east, here on a smaller scale and with less color variation, and although the main road is quite busy, most visitors hurry on to Bryce without stopping, and the areas away from the highway are usually quiet and empty.

History and lore of the old west are alive in Red Canyon, thanks to Butch Cassidy, who was raised nearby in a cabin in Circleville where he lived from 1879 until 1884 . Rumor has it that when Cassidy was in Panguitch at a dance he got himself into a brawl over a girl. Cassidy thought he killed the fellow and fled to the craggy land where Red Canyon is today. Turns out the man he knocked out was just fine, but a posse was already sent out after Cassidy. He eluded them by hiding along what is now known as the Cassidy Trail. Red Canyon is not quite as famous as old Butch, but it is part of the vast 2-million acres that make up Utah's most famous forest, Dixie National Forest.