The duality of early middle Proterozoic terranes in the Baltic Shield reflects fundamental differences in history between coeval mobile belts and the manner of their interaction. The Karelides formed on a continent-ocean transcurrent margin in which offsets developed as arcs and back-arc basins on stretched continental crust. At least one back-arc basin was obducted onto the continental margin, preserved as an allochthonous terrane in the Karelian nappe pile. Remnant arc fragments form accreted exotic terrane in Pohjanmaa. The Svecofennides developed as a succession of island arcs, while the site of subduction moved south, and successive extinct arcs were accreted onto the Archean craton. Arc terrane impingement affected deformation style in the Karelides, which changed from one of major horizontal translation to one dominated by major dextral wrench faults. Analogies can be drawn with the Phanerozoic evolution of the northeast Pacific margin.