Bixbite occurs in topaz-bearing rhyolites. It formed by crystallizing under low pressure and high temperature from a pneumatolitic phase along fractures or within miarolitic cavities and rhyolitic magmas near the surface. Minerals it is found with include bixbyite, quartz, orthoclase, topaz, spessartine garnet, pseudobrookite and hematite.

The red color is thought to be from manganese substituting for aluminum in the beryl structure.

Bixbite was named after Maynard Bixby.