The Bolnay (Hangayn) fault is an active shear system which generated the M = 8.2–38.5 Bolnay earthquake of 23 July 1905, one of world’s largest recorded intracontinental event. The fault follows the Mesozoic suture formed during the closure of the Mongolia–Okhotsk ocean. The Late Cenozoic faulting in the region was induced by propagation of strain from the India–Eurasia collision that had reached Mongolia at about 5 ± 3 Ma. The left-lateral strike slip almost all over the fault length is compensated in its western end by Late Quaternary reverse motion. We estimated coseismic slip associated with the event of 1905 and the previous earthquakes in the eastern fault end and checked whether vertical offset compensates the strike slip in this part as well. The 1905 coseismic slip measured from a displaced dry stream bed and pebble bars in the Hasany-Gol river valley was 6.5–7.5 m. The 13 ± 1 m left-lateral displacement of pebble bars in the same valley represents a cumulative slip of two events. Paleoseismological studies across the strike of surface ruptures reveal at least two generations of rupture in two events that postdated the deposition of sediments with a 14C age of 4689 ± 94 yr. Hypsometry of the alluvial surface in the zone of deformation shows gradual elevation increase toward the mountains, but without abrupt change across the fault. This means the absence of vertical offset and reactivation of the fault as a left-lateral strike slip. The horizontal slip in the eastern extension of the Bolnay fault is compensated rather by parallel fault-bounded pull-apart basins trending northeastward oblique to the principal fault strike. The age of their sedimentary fill suggests no older than middle Pleistocene normal faulting that compensated the Bolnay strike slip.