The Lewis Hills, the southernmost massif of the Bay of Islands Ophiolite, exposes a prominent shear zone. The origin of this shear zone is pivotal with respect to the interpretation of the tectonic setting of the Lewis Hills and the genesis of the Bay of Islands Ophiolite. Different models suggest that the shear zone represents a fracture zone that separates either oceanic lithospheres of similar origin or the lithospheres of an island arc and a marginal basin. A contrasting model disputes the fracture zone setting. New U-Pb zircon ages of the Lewis Hills combined with Sm-Nd systematics are used to resolve this controversy. In the western part of the Lewis Hills (Western Lewis Hills), magmatic zircons from two trondhjemite bodies yield U-Pb ages of 500.6 ± 2.0 Ma and 503.7 ± 3.2 Ma. Initial ϵNd(502 Ma) values for trondhjemites and gabbros range from −1.5 to +2.0. Both the mineral ages and Nd signature are similar to those of the island-arc –related Little Port Complex, which is located to the north of the Western Lewis Hills. In contrast, apatite from a gabbro of the eastern part of the Lewis Hills (Eastern Lewis Hills) yields a concordant U-Pb age of 485.0 ± 1.0 Ma. This gabbro has an ϵNd(485 Ma) of +7.4. The age and isotope signature link the Eastern Lewis Hills with the northern marginal-basin–related massifs of the Bay of Islands Ophiolite. The significant differences of ages and isotope characteristics of the Western and Eastern Lewis Hills support the interpretation of the shear zone as the major tectonic boundary between an island arc and a marginal basin. This complex tectonic setting may have resulted in a wide spectrum of magma compositions that involved both island arc and marginal basin sources.