A drainage basin is an extent or an area of land where surface water from rain and melting snow or ice converges to a single point, usually the exit of the basin, where the waters join another waterbody, such as a river, lake, reservoir, estuary, wetland, sea, or ocean. In closed drainage basins the water converges to a single point inside the basin, known as a sink, which may be a permanent lake, dry lake, or a point where surface water is lost underground. The drainage basin includes both the streams and rivers that convey the water as well as the land surfaces from which water drains into those channels, and is separated from adjacent basins by a drainage divide.

The drainage basin acts as a funnel by collecting all the water within the area covered by the basin and channelling it to a single point. Each drainage basin is separated topographically from adjacent basins by a geographical barrier such as a ridge, hill or mountain.

Other terms that are used to describe a drainage basin are catchment, catchment area, catchment basin, drainage area, river basin and water basin. In the United Kingdom and Australia, a watershed refers to a divide that separates one drainage area from another drainage area, while in North America, it means the drainage basin or catchment area itself. Drainage basins drain into other drainage basins in a hierarchical pattern, with smaller sub-drainage basins combining into larger drainage basins.

The Powder River Basin is a geologic region in southeast Montana and northeast Wyoming, about 120 miles (190 km) east to west and 200 miles (320 km) north to south, known for its coal deposits. The region supplies about 40 percent of coal in the United States. It is both a topographic drainage and geologic structural basin. The basin is so named because it is drained by the Powder River, although it is also drained in part by the Cheyenne River, Tongue River, Bighorn River, Little Missouri River, Platte River, and their tributaries.

While the Powder River Basin is unified geologically, residents of areas distant from the Powder River proper do not think of themselves as living in a single geographic region. For example, residents of the Crow Reservation in the Big Horn River watershed, or of Sheridan in the Tongue River watershed, would locate the Powder River Basin as the region east of the Big Horn Mountains, using a definition based on watershed and topography.