Abstract The Kai Islands occupy the region of maximum curvature in the east of the Banda arc, where the Aru trough has been regarded as the surface trace of past subduction and present arc-continent collision. Eocene to Pleistocene sediments on Kai Besar, the easternmost island, have not been deeply buried or imbricated but have experienced large-scale extensional faulting. The associated Bouguer gravity high of more than +200 mGal requires upfaulting of the accretionary complex, the attenuated Australian continental crust on which it rests and the underlying mantle at the western side of the Aru trough. Seismic reflection surveys show the deformation front within the Aru trough SE of the Kai Islands but entirely to its west further north. Instead of continuing NNE to an offset near the coast of New Guinea, the collision trace passes through the narrow and shallow strait between Kai Besar and the other islands, and thus mimics the relatively smooth curve of the Bouguer gravity contours, rather than the discontinuities of the bathymetric troughs. The continuity in deep and shallow structures is strong evidence for the existence of the outer arc as a single geological unit prior to the present phase of arc-continent collision.