How new subduction zones form is an ongoing scientific question with key implications for our understanding of how this process influences the behavior of the overriding plate. Here we focus on the effects of a Late Cretaceous subduction-initiation (SI) event in Iran and show how SI caused enough extension to open a back-arc basin in NE Iran. The Late Cretaceous Torbat-e-Heydarieh ophiolite (THO) is well exposed as part of the Sabzevar-Torbat-e-Heydarieh ophiolite belt. It is dominated by mantle peridotite, with a thin crustal sequence. The THO mantle sequence consists of harzburgite, clinopyroxene-harzburgite, plagioclase lherzolite, impregnated lherzolite, and dunite. Spinel in THO mantle peridotites show variable Cr# (10–63), similar to both abyssal and fore-arc peridotites. The igneous rocks (gabbros and dikes intruding mantle peridotite, pillowed and massive lavas, amphibole gabbros, plagiogranites and associated diorites, and diabase dikes) display rare earth element patterns similar to MORB, arc tholeiite and back-arc basin basalt. Zircons from six samples, including plagiogranites and dikes within mantle peridotite, yield U-Pb ages of ca. 99–92 Ma, indicating that the THO formed during the Late Cretaceous and was magmatically active for ∼7 m.y. THO igneous rocks have variable εNd(t) of +5.7 to +8.2 and εHf(t) ranging from +14.9 to +21.5; zircons have εHf(t) of +8.1 to +18.5. These isotopic compositions indicate that the THO rocks were derived from an isotopically depleted mantle source similar to that of the Indian Ocean, which was slightly affected by the recycling of subducted sediments. We conclude that the THO and other Sabzevar-Torbat-e-Heydarieh ophiolites formed in a back-arc basin well to the north of the Late Cretaceous fore-arc, now represented by the Zagros ophiolites, testifying that a broad region of Iran was affected by upper-plate extension accompanying Late Cretaceous subduction initiation.