Northern Honduras and its offshore area include an active transtensional margin separating the Caribbean and North American plates. We use deep-penetration seismic-reflection lines combined with gravity and magnetic data to describe two distinct structural domains in the Honduran offshore area: (1) an approximately 120 km-wide Honduran Borderlands (HB) adjacent to the Cayman Trough characterized by narrow rift basins controlled by basement-involving normal faults subparallel to the margin; and (2) the Nicaraguan Rise (NR), characterized by small-displacement normal faulting and sag-type basins influenced by Paleocene–Eocene shelf sedimentation beneath an Oligocene–Recent, approximately 1–2 km-thick carbonate platform. Thinning of continental crust from 25–30 km beneath the NR to 6–8 km beneath the oceanic Cayman Trough is attributed to an Oligocene–Recent phase of transtension. Five tectonostratigraphic phases established in the HB and NR include: (1) a Late Cretaceous uplift in the north and south-dipping thrusting related to the collision in the south, between the Chortis continental block and arc and oceanic plateau rocks of the Caribbean; (2) Eocene sag basins in the NR and minor extension in the HB; two phases (3) and (4) of accelerated extension (transtension) across the subsidence mainly of the HB; and (5) Pliocene–Recent minor fault activity in the HB and a stable carbonate platform in the NR.