As part of the LITHOPROBE East project, a marine deep seismic reflection line was run in 1984 across the continental margin northeast of Newfoundland. The seismic data define reflectors both within and below the sedimentary section. The deeper, intracrustal reflectors help determine the nature of extensional tectonics and associated sedimentary basin evolution on the rifted margin. The line also crosses the ocean–continent transition and helps define structure in that region. Interpretation of the seismic data shows that brittle extension of the upper crust was accommodated along at least one subhorizontal level of décollement. The most obvious style of deformation involves the shallowest level of décollement on which high-angle planar normal faults detach. A deeper level of décollement is inferred from the presence of low-angle listric normal faults penetrating the lower crust or deeper. There is no evidence for a unidirectional low-angle shear zone controlling extension. The seismic data are used to constrain a depth-dependent numerical model of extension. Best-fit estimates of the basin subsidence history support a model in which there are several episodes of stretching and in which there is significantly more stretching in the lower lithosphere than in the upper lithosphere. At the ocean–continent transition, the oceanic crust appears to thicken as it dips beneath the rifted continental crust. This may result from the production of basaltic magma and its migration to crustal levels during rifting.