Gneiss domes preserved throughout the Paleoproterozoic (1870–1820 Ma) Penokean orogenic belt are commonly viewed as collisional features. However, 1700 Ma mica 40Ar/39Ar ages from Archean rocks of the McGrath gneiss dome, Minnesota, are in marked contrast with 1750–1760 Ma mica ages obtained everywhere outside the dome, suggesting the dome may have formed well after compression had ceased. We hypothesize that the bimodal age pattern is a result of crustal excision between Archean basement and Paleoproterozoic cover during extensional collapse of the overthickened orogen. Removal of structural section and progressive unroofing may have led to the development of a domed basement-cover shear zone. In this respect, the McGrath gneiss dome would represent one of the oldest analogues of a metamorphic core complex. Postorogenic collapse of the Penokean orogen was apparently long-lived, with significant pulses occurring at ∼1755 Ma and at ∼1700 Ma The sudden and widespread crustal fusion at 1770–1760 Ma that preceded the proposed collapse suggests that rapid subcrustal lithospheric thinning may have triggered collapse as has been proposed recently for several Phanerozoic collapsed orogens.