An investigation of a normal-fault system in the southern Canadian Cordillera documents extensional shear zones exhumed from the middle crust, including the root of a transfer zone between overstepping fault segments in which shearing was enhanced by leucogranitic melts. The western margin of the Shuswap metamorphic core complex is delimited by west-dipping, ductile-brittle normal faults of the Eocene Okanagan Valley fault system. Migmatites with gently dipping mylonitic fabrics have been exhumed in the footwalls of the Okanagan–Eagle River and Adams–North Thompson fault segments. The mylonitic fabrics formed in upper amphibolite facies, continued to evolve in greenschist facies, and display asymmetric features that consistently indicate westward movement of the hanging wall. The Shuswap Lake transfer zone is a 45-km-wide left stepover between the two fault segments where a domed mylonitic shear zone has been exhumed and cut by high-angle brittle faults. Mylonites in the transfer zone display the same sense of shear as the mylonites that are associated with the overstepping fault segments. All of these mylonites are interpreted as having formed in a mid-crustal shear zone in which the fault system was rooted. The mylonites in the transfer zone are distinct, however, in that they formed in leucogranite (the Pukeashun granite). Structural relationships imply that the leucogranitic melts were emplaced during extensional shearing and that their distribution may have been influenced by preexisting structures in both the footwall and the hanging wall of the system. The melts in turn controlled the evolution of the transfer zone, facilitating the processes of heterogeneous extension, footwall doming, and differential exhumation.