Marine surveys show that the submarine Huatung Ridge extends northward to the Lichi Mélange in the southwestern Coastal Range, suggesting that formation of the Lichi Mélange is related to arcward thrusting of the forearc strata in the western part of the North Luzon Trough during active arc-continent collision off southern Taiwan. A new seismic survey along the 21° N transect across the North Luzon Trough in the incipient arc-continent collision zone further reveals that deformation of the Huatung Ridge occurred soon after sedimentation in the western forearc basin, whereas sedimentation was continuous in the eastern part of the remnant North Luzon Trough until the complete closure of the forearc basin approaching SE Taiwan. This suggests that the sequence in the Huatung Ridge can be coeval with just the lower sequence of the remnant-forearc-basin strata. Multiple lines of new evidence, including micropaleontology, clay mineralogy, and fission track analyses along the Mukeng River and its tributary key sections, are used to test this thrusting-forearc-origin hypothesis of the Lichi Mélange. In the SW Coastal Range the Lichi Mélange lies between the collision suture of Longitudinal Valley to the west and the Taiyuan remnant forearc basin to the east. A field survey indicates that the Taiyuan forearc-basin sequence and its volcanic basement were thrust westward over the Lichi Mélange along the east-dipping Tuluanshan Fault. The Lichi Mélange shows varying degrees of fragmentation of strata, mixing, and shearing. An apparently wide range of facies is present, from the weakly sheared broken formation facies, with discernible relict sedimentary structures, to the intensely sheared block-in-matrix mélange facies, with pervasively scaly foliation dipping to the SE. Sedimentological study reveals that the subangular to subrounded, fractured, matrix-supported metasandstone conglomerates in the pebbly mudstone layers are repeatedly found in the broken formation facies of the Lichi Mélange. Their composition and occurrence are identical to the deep-sea-fan conglomerate beds in the Taiyuan remnant-forearc-basin strata to the east. Benthic foraminiferal faunas are similar in the Lichi Mélange, regardless of the varying intensity of shearing and strata disruptions, and are compatible with the benthic foraminiferal fauna in the Taiyuan remnant-forearc-basin turbidites, supporting the interpretation that the protolith of the Lichi Mélange was originally deposited in the North Luzon Trough. Age determination of planktic microfossils further demonstrates that the Lichi Mélange is early Pliocene (3.5–3.7 Ma), implying that this mélange was deposited in a short time and that deformation occurred soon after its deposition. The early Pliocene age of the Lichi Mélange is coeval with just the lower part of the Taiyuan remnant forearc strata, and is much younger than the upper forearc sequence (3–1 Ma). Thus the Taiyuan coherent-forearc-basin strata (3.7–1 Ma) were deposited continuously in the remnant North Luzon Trough regardless of the deformation in its western part (the protomélange). This scenario is an analogue for the modern configuration of the Huatung Ridge–remnant North Luzon Trough off the southern Coastal Range in the active arc-continent collision zone north of lat 21° N. In addition to its kaolinite content (11–15%), the clay mineral composition of the Lichi Mélange is compatible with the Taiyuan remnant forearc turbidites. In the Coastal Range, kaolinites are found only in the volcanic rocks of the Tuluanshan Formation. This additional kaolinite in the Lichi Mélange could not have been derived from the exposed accretionary prism to the North Luzon Trough by sedimentary mass slumping, because no such volcanic rocks are now exposed in the accretionary prism west of the Coastal Range. Instead, they could have been derived from the Tuluanshan Formation when it was emplaced into the Lichi Mélange by thrusting during the last 1 Ma when the Luzon arc-forearc was accreted to form the southern Coastal Range. Thus the kaolinites of the volcanic arc rocks were redistributed into the Lichi Mélange by fluid flows along the ubiquitous geological fractures in the mélange, consistent with the field occurrences of the large, rootless, fault-bounded volcanic rocks of andesitic breccia, tuff, and agglomerates that were floating in the intensely sheared block-in-matrix mélange facies of the Lichi Mélange. Mélange is commonly considered to develop in the accretionary prism of a subduction zone. However, the Lichi Mélange in the SW Coastal Range originated from the thrust forearc strata, representing a unique forearc mélange for orogenic belts worldwide. The young age and wide distribution—especially the continuous offshore-onshore connection—of the Lichi Mélange provides a unique example for further research into active modern mélange-forming processes by forearc thrusting during progressive closure of the forearc basin in this active region of arc-continent collision.