Determining how faults behave during large earthquakes can help provide insight into the mechanism of regional tectonism. Here, we use Advanced Land Observing Satellite‐2 (ALOS‐2) and Sentinel‐1 Interferometric Synthetic Aperture Radar (InSAR) data to estimate the source parameters of the 2017 6.6 Poso earthquake, eastern Indonesia. The results show that the coseismic rupture was predominated by normal faulting at depths of 3–10 km, whereas some distinct dextral strike slip is also resolved along the down‐dip direction of normal‐faulting zones. We analyze the background seismicity, regional topography, and fault kinematics to investigate the present‐day tectonics of central Sulawesi as well as its evolutionary processes. Our preferred slip model provides support for the proposed kinematic model that attributes the extension in central Sulawesi to gravitational collapse, in which mass lateral extrusion along the large‐scale Palu‐Koro strike‐slip fault played an important role.