The Main Donegal Granite is shown to lie in a major, late stage, NE-SW trending transcurrent sinistral shear zone in the Caledonides of NW Ireland. The zone, which is bent both laterally and upwards around the pluton, has displacements which diminish SW along its length from a maximum of approximately 20 km at the NE end of the pluton. The granite has also been deformed by this sinistral shear but it has a strain component of its own, the nature and development of which indicate that the pluton was accommodated rather than forcefully emplaced in the shear zone. Strain variations between granite and wall rock, and an early plagioclase fabric associated with the petrographic banding of the granite, suggest that intrusion and deformation were more or less synchronous (at around 400 Ma). It is suggested that unconsolidated granite in the shear zone locally created high strain rates and instability which caused the zone to bend, split lengthwise, and progressively create an internal low pressure zone into which the Main Granite was emplaced. The wide variety of emplacement styles of the other, radiometrically synchronous, plutons of the batholith can be attributed to the progressive development of the shear zone: Thorr and Fanad in tension between the zone and a complimentary structure to the N; Ardara and Toories in local compression at the shear zone termination; Rosses in tension on the outer arc of the bending zone; and Trawenagh Bay, as displaced Main Granite magma, in a similar tensional setting during the final stages of deformation.