Growing evidence supports that the early Mesozoic development of South China was deeply shaped by flat subduction of the paleo-Pacific plate. However, the Jurassic tectonic setting and processes remain controversial. Here, we present new detrital zircon U-Pb ages and sedimentary data from the Jurassic basin in northwestern Zhejiang to constrain the Jurassic tectonic evolution. The continuous Jurassic succession archives an abrupt sedimentary change from a high-energy coastal environment to a proximal and fast-filling terrestrial environment. This lithostratigraphic change was also accompanied by the shift of detrital provenance. Age spectra of the detrital zircons from the bottom of the Jurassic strata show strong 1.0–0.7 Ga and 500–400 Ma populations, which are inferred to be mainly derived from the Yangtze block. In contrast, samples from the overlying Lower–Middle Jurassic were dominated by age groups of 2.0–1.7 Ga and 300–170 Ma, which were probably sourced from the Cathaysia block. The switch of the sedimentary and provenance characteristics reveals that an earliest Jurassic broad sag basin in the inland shifted to an Early–Middle Jurassic retro-arc foreland basin along the coastal region. Abundant Jurassic-aged zircons are compatible with the re-initiation of “normal subduction” in the Early Jurassic. The re-initiation of “normal subduction” resulted in the generation of an accretionary orogeny, continental arcs, and a retroarc foreland basin along the eastern South China margin in contrast to the extensional regime in the inland. The basin response and distinct tectonic regimes of the inland and continental margin in the Early–Middle Jurassic support a geodynamic turnover from flat to normal subduction.