Basin and Range extension, which began in the Tertiary and continues today, is well documented in Mexico north of the Trans-Mexican volcanic belt. In contrast, evidence for Basin and Range extension in southern Mexico is largely limited to the Oaxaca basin, a north-northwest–trending Miocene graben. We discovered another north-northwest–trending Tertiary basin, the Arcelia graben, approximately 200 km west of the Oaxaca basin and 50 km south of the Trans-Mexican volcanic belt. Arcelia graben subsidence began in the early Tertiary and mostly ended prior to accumulation of upper Oligocene volcanic rocks, indicating Basin and Range extension in this area was limited to a <32 m.y. interval in the Tertiary. Extension near Arcelia is among the oldest Basin and Range style deformation documented in Mexico. Most subsidence in the Arcelia graben preceded onset of Oaxaca basin subsidence by at least 8 m.y. This suggests the intriguing possibility of eastward migration of Basin and Range extension in southern Mexico during the middle Tertiary.