Metasedimentary rock successions in Sierra Albarrana Group (SW Iberia Autochthonous Domain) were deposited during the Early Paleozoic influenced by the evolution of a peri-Gondwanan active margin. Their geochemical composition indicates dominant contributions from felsic igneous sources and an upper continental crust provenance. The high mineralogical and geochemical maturity, together with negative εNd(530), ranging from − 11.3 to − 4.5, and old Nd model ages (TDM: 1388–1897 Ma) imply reworked materials from old continental source areas with a limited juvenile contribution for the siliciclastic sedimentary rocks in Sierra Albarrana. Both, geochemical and isotope features were caused by the progressive denudation of rocks bearing the isotopic imprint from an old basement exposed along the Gondwanan margin. The paleobasin for the SW Iberia Autochthon probably occupied an outboard position across the peri-Gondwanan margin during Ediacaran–Cambrian times. In a convergent scenario, the interaction between the peri-Gondwanan trench and the external part of the continent generated tectonic uplift, giving way to exposure of crust formed during earlier stages of the Cadomian Orogeny and erosion. Sediment redistribution through Early Paleozoic times supplied recycled detrital materials, which likely filled a retro-arc basin formed after the switch from an extensional to a compressional regime in the upper plate of the Cadomian Orogen that is recorded throughout the peri-Gondwanan domain of Iberia. A subsequent extensional stage led to a progressive widening of its marginal basins, thus bringing the onset of a passive margin from the Cambro–Ordovician onwards. Nd model ages of the Sierra Albarrana Group overlap those of Early Cambrian series from the southernmost Central Iberian Zone, and are considered an indication for the paleogeographic closeness between all these sequences during Cambrian times, occupying eastern positions closer to Tuareg Shield and the Sahara Metacraton sections along the Gondwanan margin.