The Vietnamese margin forms a key region to the understanding of escape tectonics and the development of the South China Sea (SCS). The existing geological reconstructions of the region are restricted to studies of single basins, are based on limited amounts of geophysical data or analysis of onshore geological features. These models are critically assessed on the basis of interpretation of the most comprehensive 2-D digital seismic database published to date within the area combined with a thorough analysis of existing literature, and a new model is presented. The Vietnamese margin is underlain by a series of Paleogene rift basins established through southeastward extrusion of Indochina. The East Vietnam Boundary Fault (EVBF) forms the almost 1000 km long seaward continuation of the left-lateral Ailao Shan-Red River Shear Zone (ASRRSZ). Toward the southern half of the Phu Khanh Basin the EVBF breaks up into discrete segments and splays into the SE-directed Tua Hoa Fault Zone. Paleogene faults splayed from the EVBF and the Mae Ping Shear Zone and accommodated the coeval motion of these two major left-lateral structural lineaments. During the late Oligocene, basin inversions offshore occurred contemporaneously with initial right-lateral inversion along the Mae Ping Shear Zone and the onset of major uplift of the metamorphic core complexes along the ASRRSZ. It is suggested that a dramatic change of the regional stress pattern occurred in response to the northward movement of India and the effective coupling of the West Burma Block and India, the later resulting in broadening of the indenting continental mass. After the mid-Oligocene, left-lateral movements across the offshore EVBF decreased and eventually ceased. Later, onshore sinistral movements were accommodated by internal shortening and local clockwise block rotations within the Shan-Thai Terrain. Renewed rifting offshore south Vietnam resulted from the jump of the SCS spreading axis and subsequent Neogene southwestward propagation of continental break-up. The Neogene opening of the SCS is viewed as a consequence of a slab-pull associated with subduction of the proto-SCS underneath Borneo as offshore Neogene escape tectonism had virtually ceased. During this phase of rifting, right-lateral transtension is inferred along N to NW oriented fault zones in the Phu Khanh and the Nam Con Son basins. Rifting and by inference seafloor spreading continued until the end of middle Miocene time although at significantly reduced rates during the final 5–10 Ma. Termination of seafloor spreading is marked by a distinct latest middle Miocene unconformity in the Nam Con Son and the southern Phu Khanh basins. Neogene volcanism resulted in the build-up of several magmatic structures across the central and South Vietnamese margin and induced reactivation of older faults in the Phu Khanh Basin. The offshore magmatism heralded widespread volcanism onshore southern Indochina associated with a latest Neogene uplift and denudation event. The uplift led to significantly increased siliciclastic accumulation rates offshore, which repressed widespread carbonate deposition.