Sinistral displacements across the North American–Caribbean plate boundary in northern Central America are distributed among major arcuate faults that have been active in Neogene time. South of the Jocotán and Motagua faults in Guatemala, extensional tectonics has accompanied rotation of the trailing edge of the Caribbean plate around these faults. Segmentation of the volcanic arc in northern Central America, hitherto attributed to transverse breaks in the subducting Cocos plate, may instead be a result of this block rotation. Accompanying changes along the arc are observed in seismicity, gravity anomaly patterns, volume and composition of volcanic products, and topography. Therefore, the complex volcano-tectonic geology south of the main boundary faults may be explained by interaction and rotation of crustal blocks in the overriding Caribbean plate above the magma production zone along the downgoing Cocos slab.