The geographical location of the Lhasa terrane in the Permian remains a subject of debate. The recognition of the Permian basalts in the Tethyan Himalaya and the Permian volcanic rocks in the Lhasa terrane in southern Tibet together with the geochemistry of these rocks offer some new insights. The Permian basalts in the Tethyan Himalaya show a geochemical affinity with tholeiitic continental flood basalts, and are interpreted to have formed in an extensional setting. The new geochemical data and the geographical distribution of these basalts indicate that they probably represent the easternmost extent of the Panjal continental flood basalt province. All of the Permian basalts in the Lhasa terrane show a calc-alkaline, high-alumina basalt affinity, with significant negative Nb‑Ta‑Ti anomalies. These geochemical features, combined with the recent documentation of the Permian Songdo eclogite and sedimentological observations, indicate the existence of a subduction system beneath the central Lhasa subterrane in the Permian. The presence of both extension- and arc-type magmatism of Permian age in present-day southern Tibet is inconsistent with the general view that the Lhasa terrane did not rift away from the northern margin of the Greater India until the Late Permian or Triassic. Instead, we suggest that the central Lhasa subterrane may have been a microcontinent isolated in the Paleo-Tethyan Ocean basin, at least during the Carboniferous–Middle Permian time.