Abstract The understanding of the velocity structure and basement morphology within the basin is crucial for seismic hazard mitigation and the study of basin evolution. To explore the intricate structure of the Binchuan Basin in western Yunnan, China, we deployed a linear dense array in the northern region of the Binchuan Basin, with inter‐station distance ranging from 50 to 100 m. We propose a novel receiver function processing workflow. Initially, we extracted coherent receiver functions based on the dense array, followed by a inversion of basement morphology, S‐wave velocities, and sedimentary layer's average V p / V s ratio jointly with frequency‐dependent teleseismic apparent shear velocity and receiver function waveforms. The results show that S‐wave velocity anomalies correspond to the unconsolidated sediments. The thickness of the sedimentary layer ranges from ∼0.5 to ∼0.75 km. The basement morphology suggests the basin is controlled by normal faults. Additionally, intra‐basin faults displayed higher fault displacement to length ratios (∼0.27) than most isolated normal faults (10 −3 –10 −1 ), which may result from accumulated fault displacement due to interactions between fault segments. These results emphasize the significant role of N–S trending intra‐basin faults in basin evolution, suggesting that micro‐block rotations and transitional movements within the Northwestern Yunnan Rift Zone are primary mechanisms shaping the Binchuan Basin. We further proposed a multi‐stage model for the evolution of the Binchuan Basin. The robustness testing validates that the proposed processing flow is an effective approach to comprehensively image the basin velocity structure and the basement morphology.