Cenozoic Qaidam basin, the largest active intermountain basin inside Tibet, figures importantly in the debates on the history and mechanism of Tibetan plateau formation during the Cenozoic Indo-Asian collision. To determine when and how the basin was developed, we conducted detailed geologic mapping and analyses of a dense network of seismic reflection profiles from the southern Qilian Shan-Nan Shan thrust belt and northern Qaidam basin. Our geologic observations provide new constraints on the timing and magnitude of Cenozoic crustal thickening in northern Tibet. Specifically, our work shows that the southernmost part of the Qilian Shan-Nan Shan thrust belt and contractional structures along the northern margin of Qaidam basin were initiated in the Paleocene-early Eocene (65–50 Ma), during or immediately after the onset of the Indo-Asian collision. This finding implies that stress was transferred rapidly through Tibetan lithosphere to northern Tibet from the Indo-Asian convergent front located >1000 km to the south. The development of the thrust system in northern Qaidam basin was driven by motion on the Altyn Tagh fault, as indicated by its eastward propagation away from the Altyn Tagh fault. The eastward lengthening of the thrust system was spatially and temporally associated with eastward expansion of Qaidam basin, suggesting thrust loading was the main control on the basin formation and evolution. The dominant structure in northern Qaidam basin is a southwest-tapering triangle zone, which started to develop since the Paleocene and early Eocene (65–50 Ma) and was associated with deposition of an overlying southwest-thickening, growth-strata sequence. Recognition of the triangle zone and its longevity in northern Qaidam basin explains a long puzzling observation that Cenozoic depocenters have been located consistently along the central axis of the basin. This basin configuration is opposite to the prediction of classic foreland-basin models that require the thickest part of foreland sediments deposited along basin edges against basin-bounding thrusts. Restoration of balanced cross sections across the southern Qilian Shan-Nan Shan thrust belt and northern Qaidam basin suggests that Cenozoic shortening strain is highly inhomogeneous, varying from ~20% to >60%, both vertically in a single section and from section to section across the thrust belt. The spatially variable strain helps explain the conflicting paleomagnetic results indicating different amounts of Cenozoic rotations in different parts of Qaidam basin. The observed crustal shortening strain also implies that no lower-crustal injection or thermal events in the mantle are needed to explain the current elevation (~3000–3500 m) and crustal thickness (45–50 km) of northern Qaidam basin and the southern Qilian Shan-Nan Shan thrust belt. Instead, thrusting involving continental crystalline basement has been the main mechanism of plateau construction across northern Qaidam basin and the southern Qilian Shan-Nan Shan region.