Using the results of reconnaissance seismic reflection and magnetic surveys of the region, the Caroline Basin is interpreted as having been created by two phases of sea-floor spreading. The first phase, beginning prior to 42 m.y. B.P., accreted crust from an east-northeast–striking spreading center for at least 17 m.y. until the spreading axis was ingested into the northward-dipping subduction zone south of the West Caroline Ridge about 25 m.y. B.P. The possibility exists that the Eauripik–New Guinea Rise was formed on the southern limb of this spreading center by a mantle plume operative during this period.

The second phase of sea-floor spreading, beginning prior to 18 m.y. B.P., was located in the northwest corner of the pre-existing basin. This spreading axis was oriented west-northwest and persisted for at least 4.3 m.y., until about 13.7 m.y. B.P. This spreading axis was probably responsible for formation of the Northwest Caroline Basin fracture zone, which separates its southern terminus from the older basin crust, and for the reactivation of the western part of the defunct West Caroline Ridge subduction zones.

Major segments of the basin margin are interpreted as subduction zones, ranging from inactive to possibly incipient.

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