A 2500 km2 mountainous river catchment in northern South Island, New Zealand, drained southwards until the late Quaternary. The catchment is being transported laterally at c. 36 mm a−1 relative to the southern South Island by dextral strike-slip motion along the Pacific–Australian Plate boundary (Alpine Fault). This lateral motion has moved the eastern half of the catchment from a zone of uplift into a zone of subsidence over the past million years, triggering drainage reversal. Sedimentation from the catchment switched from a sedimentary basin in the SE to a basin in the north. Profiles of river terrace remnants, formed from glacial outwash, show that drainage reversal occurred in the latter stages of deposition of the oldest recognizable terrace. Clast imbrication patterns and clast petrography in that terrace indicate southward flow, whereas flow had a northerly component in younger terraces and a nearby active river. In addition, 1.6% genetic divergence of fish on either side of the new drainage divide is consistent with late Quaternary separation by drainage reversal. The timing of drainage reversal is estimated from regional terrace correlation and the magnitude of the genetic divergence to be between 100 and 200 ka bp.