The Altyn Tagh fault is one of the largest intracontinental strike-slip faults in the world, extending linearly ~1500 km along the northern edge of the Tibetan Plateau. All tectonic units bounded by the fault on the south, such as the Qaidam Basin and the Qilian Shan thrust belt, have experienced intensive shortening and uplift due to transfer motion from the Altyn Tagh. However, questions as to whether the tectonic units north of the Altyn Tagh fault have experienced associated deformation and whether the Altyn Tagh fault itself has experienced deformation remain unexplored. Our field study shows that the middle part of the Altyn Tagh fault separates the Altyn Tagh belt to the north from the Qaidam Basin to the south. The former was formed as a NE-SW–trending, lens-shaped block, consisting mainly of metamorphic rocks of Proterozoic age, and the latter is a basin that has been elongated in the E-W direction and filled with a thick succession of fluvial and lacustrine sediments of Cenozoic age. The Altyn Tagh fault has been considered to progressively propagate linearly to the northeast, accommodating the northeastward growth of the Tibetan Plateau by transfer of horizontal motion into intensive crustal shortening and uplift along the northeastern margin of the plateau. However, structural data from the main part of the fault show that this part of the fault was dominated by transtensional deformation in late Cenozoic time, which resulted in the subsidence of the large Xorkol Basin and deposition of a succession of fluvial and lacustrine sediments as old as Pliocene age. The foliation in the early Proterozoic metamorphic rocks within the Altyn Tagh belt generally strikes NE-SW, but the foliation along the main part of the belt is bent around the Xorkol Basin to strike NW-SE. Such deformation caused the increase in the width of the belt. These data led us to infer that the Altyn Tagh belt has experienced oroclinal bending along the main part of the Altyn Tagh fault around a vertical axis. From the difference in length along the northern and southern edges of the basin, as much as 60 km of late Cenozoic left-lateral motion along the main part of the Altyn Tagh fault was absorbed by the crustal bending and associated extension. The bending of the Altyn Tagh belt implies that the southwestern movement of the Altyn Tagh belt relative to the Qaidam Basin met with strong resistance, which is interpreted to have been generated by NE-SW compression along an E-W–trending segment of the Altyn Tagh fault to the southwest of the Xorkol Basin as part of a restraining bend.