The relationships between tectonics and hotspot-related magmatism in transform/transtensive settings are poorly known. The Azores archipelago, lying where the transform plate boundary between the Nubian and Eurasian plates meets the Mid-Atlantic Ridge, is a rare site to investigate these relationships. The distinct tectono-magmatic features of Faial make it the ideal island to focus the study. Here, we analyze the relationships between tectonics and magmatism, using remote-sensing, field, and paleomagnetic analyses. Dominant WNW-ESE–trending lineaments correspond to major faults with transtensive dextral motion and NE-SW opening, probably related to the nearby transtensive Terceira Rift. Most (∼60%) dikes, vent elongations, and alignments are parallel to this system. The lavas forming the basement of the distinctive WNW-ESE–trending Pedro Miguel graben strike parallel to the graben axis, dipping outward with a tilt consistent with that of paleomagnetic data. These lavas are dissected by the WNW-ESE–trending transtensive faults. Therefore, the graben consists of outward-tilted fault-bounded blocks, forming two opposite-verging dominoes. Its estimated stretching factor (β = 1.35) and mean extension rate (between 3.4 and 8.2 mm/yr) are similar or slightly larger than those of Terceira Rift, to the east. Part of the graben extension may be magma induced, via diking. We suggest that: (1) Faial, along with the nearby Pico Island, is a major locus of extension within the Azores, directly above the imaged hotspot; and (2) the Faial-Pico magmatic segment constitutes the offset, westward magmatic continuation of the Terceira Rift. The segment opening highlights the importance of extensional strain along magmatic transtensive plate boundaries.