The main objective of this article is to study the nonlinear stability and dynamic transitions of the basic (zonal) shear flows for the three-dimensional continuously stratified rotating Boussinesq model. The model equations are fundamental equations in geophysical fluid dynamics, and dynamics associated with their basic zonal shear flows play a crucial role in understanding many important geophysical fluid dynamical processes, such as the meridional overturning oceanic circulation and the geophysical baroclinic instability. In this paper, first we derive a threshold for the energy stability of the basic shear flow, and obtain a criterion for local nonlinear stability in terms of the critical horizontal wavenumbers and the system parameters such as the Froude number, the Rossby number, the Prandtl number and the strength of the shear flow. Next, we demonstrate that the system always undergoes a dynamic transition from the basic shear flow to either a spatiotemporal oscillatory pattern or circle of steady states, as the shear strength of the basic flow crosses a critical threshold. Also, we show that the dynamic transition can be either continuous or catastrophic, and is dictated by the sign of a transition number, fully characterizing the nonlinear interactions of different modes. Both the critical shear strength and the transition number are functions of the system parameters. A systematic numerical method is carried out to explore transition in different flow parameter regimes. In particular, our numerical investigations show the existence of a hypersurface which separates the parameter space into regions where the basic shear flow is stable and unstable. Numerical investigations also yield that the selection of horizontal wave indices is determined only by the aspect ratio of the box. We find that the system admits only critical eigenmodes with roll patterns aligned with the x-axis. Furthermore, numerically we encountered continuous transitions to multiple steady states, as well as continuous and catastrophic transitions to spatiotemporal oscillations.