Although the Ordovician Macquarie Arc, part of the eastern Lachlan Orogen of southeastern Australia, has long been considered to be an intra-oceanic arc within an accretionary orogen, key characteristics contrast with more typical examples of accreted arcs. Significantly, multiple stacked phases of mafic to intermediate volcanic rocks, with suprasubduction-zone chemistry, are flanked to the east and west by extensive, coeval continental margin turbidite, chert and black shale sequences. By analysing stratigraphic and contact relationships within and between the volcanic rocks, ophiolitic components (sensu lato) and turbidite sequences, constrained by precise biostratigraphy, we document a repeated cycle of uplift, upper-plate extension and collapse common to all sequences. This cycle is interpreted as resulting from localized extension (rifting or hyper-extension and lower-crustal delamination) within a continent-margin sequence developed upon an already established marginal or back-arc basin of probable middle to late Cambrian age. Our interpretation provides a counter-example to prevailing arc accretion models by inferring extensional tectonics at the palaeo-Pacific east Gondwana margin during the Ordovician with development of alkalic and calc-alkalic Cu–Au porphyry deposits away from an active arc system.