Recent multichannel seismic reflection data acquired offshore southwest Taiwan identify active extension along a deep-seated normal fault in the precollision setting of the Taiwan arc-continent collision. While ubiquitous minor flexural faulting may be observed in the Taiwan foreland, these new data image a listric, rift basin–bounding normal fault that penetrates deep into the crust and forms a significant fault scarp with ∼850 m of relief near the continental shelf break southwest of the Taiwan collision zone. These observations, along with new geodynamic models of collision between a subduction zone and a young passive margin, indicate that the recent extension may be the expression of plate bending in continental crust as thin transitional crust subducts at the Manila Trench. A similar extensional episode prior to the onset of arc-continent collision ca. 6.7 Ma has been identified in rift basins of the southern Chinese margin near Taiwan, further suggesting that collision may be preceded by bending-related extension of the continental shelf. The Lishan fault, a major structural and morphologic boundary in the Taiwan orogen, may have been a similar rift basin–bounding fault before being reactivated during the Taiwan arc-continent collision. In this scenario, the Lishan fault divides Taiwan into a western domain representing collision of the thick crust of the continental shelf and an eastern domain representing subduction and collision of thin transitional crust along the continental slope with the Manila Trench.