The Painted Hills were created over millions of years. The volcanic ash was subjected to weathering under various climate regimes resulting in vividly colored red, pink, bronze, tan and black layers of rock.
Although it looks like an infrared shot, this image was made with normal transparency film, and yes the colors were this vivid. There were no saturation or color enhancements made to the scan. Just off the highway in Mitchell, there is a nice Bed & Breakfast house called the Historic Oregon Hotel. Its just a short drive from there to the Painted Hills.