While no large interplate thrust earthquakes are known at the South Sandwich subduction zone, historical catalogues include a number of earthquakes with reported magnitudes of 7 or more. We present a detailed seismological study of the largest one (27 June 1929; MPAS = 8.3). The earthquake relocates 80 km north of the north-western corner of the arc. Its mechanism, inverted through the PDFM method, features normal faulting on a steeply dipping fault plane (φ = 71°, δ = 70°, λ= 272°). The seismic moment, 1.7 x 1028 dyn.cm, supports Gutenberg and Richter’s estimate, and is 28 times the largest shallow CMT in the region. The 1929 event is interpreted as representing a lateral tear in the South Atlantic plate, comparable to similar earthquakes in Samoa and Loyalty, deemed “STEP faults” by Govers and Wortel (2005). Hydrodynamic simulations using the MOST method (Titov and Synolakis, 1997) suggest deep-water tsunami amplitudes reaching 30 cm off the coast of Brazil, where run-up should have been observable, and 20 cm along the Gulf of Guinea (Ivory Coast, Ghana). We also simulate a number of potential sources obtained by assigning the 1929 moment to the geometries of other known earthquakes in the region, namely outer-rise normal faulting events at the center of the arc and its southern extremity, and an interplate thrust fault at the southern corner, where the youngest lithosphere is subducted. A common feature of these models is the strong focusing of tsunami waves by the South Atlantic Ridge, the southwest Indian Ocean Ridge, and the Agulhas Rise, resulting in amplitudes always enhanced in Ghana, southern Mozambique and certain parts of the coast of South Africa. This study documents the potential tsunami hazard to South Atlantic shorelines from earthquakes in this region, principally normal faulting events.