The Martian hemispheric dichotomy shows compressional features a few hundred kilometers south of the dichotomy boundary, and contemporaneous extensional features along the boundary. Two processes that may have contributed to the observed deformation are lateral lower-crustal flow and erosion. Crustal flow causes a decrease in crustal thickness in the south, and an increase in the north. The result is compressional surface stresses in the highlands and extensional stresses around the dichotomy boundary. The magnitude, location, and timing of the predicted stresses are consistent with the observed tectonic features and strongly suggest that moderate lateral flow occurred. For the nominal heat flux and rheology, sufficient lateral flow is generated for a mean crustal thickness of 70 km. Erosion generates extension in the south and compression in the north, opposite to what is observed. Either erosion only resulted in local, as opposed to regional, distribution of highland material, or the rigidity of the lithosphere was sufficiently high at the time of erosion that significant stresses did not develop.