We present data and models for the present-day stress and strain pattern in the Pannonian Basin and surrounding East Alpine–Dinaric orogens. Formation of the Pannonian Basin within the Alpine mountain belt started in the early Miocene, whereas its compressional reactivation has been taking place since late Pliocene–Quaternary time. Basin inversion is related to changes in the stress field from a state of tension during basin formation in the Miocene to a state of compression resulting from the convergence between the Adria microplate and the European plate. Seismicity indicates that deformation is mainly concentrated along Adria's boundaries where pure contraction (thrusting in Friuli and the southeastern Dinarides), often in combination with transform faulting (dextral transpression in the central Dinarides), is predominant. Tectonic stresses and deformation are transferred into the Pannonian Basin, resulting in a complex pattern of ongoing tectonic activity. From the margin of Adria toward the interior of the Pannonian Basin, the dominant style of deformation gradually changes from pure contraction, through transpression, to strike-slip faulting. Shortening in the basin system, documented by earthquake focal mechanisms, global positioning system (GPS) data, and the neotectonic habitat, has led to considerable seismotectonic activity and folding of the lithosphere. The state of recent stress and deformation in the Pannonian Basin is governed by the interaction of plate-boundary and intraplate forces, which include the counterclockwise rotation and N-NE–directed indentation of the Adria microplate (“Adria-push”) as the dominant source of compression, in combination with buoyancy forces associated with differential topography and lithospheric heterogeneities.