The Garedu Red Bed Formation (GRBF) of the northern Tabas Block (Central-East Iranian Microcontinent, CEIM) is a lithologically variable, up to 500-m-thick, predominantly continental unit. It rests gradually or unconformably on marine limestones of the Esfandiar Subgroup (Callovian–Oxfordian) and is assigned to the Kimmeridgian–Tithonian. In the lower part, it consists of pebble- to boulder-sized conglomerates/breccias composed of limestone clasts intercalated with calcareous sandstones, litho-/bioclastic rudstones and lacustrine carbonates. Up-section, sharp-based pebbly sandstones and red silt-/fine-grained sandstones of braided river origin predominate. Palaeocurrent data suggest a principal sediment transport from west to east and a lateral interfingering of the GRBF with marine greenish marls of the Korond Formation at the eastern margin of the Tabas Block. Westwards, the GRBF grades into the playa deposits of the Magu Gypsum Formation. Red colours and common calcretes suggest arid to semi-arid climatic conditions. The onset of Garedu Red Bed deposition indicates a major geodynamic change with the onset of compressive tectonics of the Late Cimmerian Tectonic Event (LCTE), being strongest at the eastern margin of the northern Tabas Block. When traced southwards, the same tectonic event is expressed by extension, indicating a shift in tectonic style along the boundary fault between the Tabas and Lut blocks. The complex Upper Jurassic facies distribution as well as the spatio-temporal changes in tectonic regime along the block-bounding faults are explained by the onset of counterclockwise vertical-axis rotation of the CEIM in the Kimmeridgian. The block boundaries accommodated the rotation by right-lateral strike slip, transpressional in today’s northern and transtensional in today’s southern segments of the block-bounding faults. Rotation occurred within bracketing transcurrent faults and continued into the Early Cretaceous, finally resulting in the opening of narrow oceanic basins encircling the CEIM. Palaeogeographically, the GRBF is part of a suite of red bed formations not only present on the CEIM, but also along the Sanandaj-Sirjan Zone (NW Iran), in northeastern Iran and beyond, indicating inter-regional tectonic instability, uplift and erosion under (semi-)arid climatic conditions across the Jurassic–Cretaceous boundary. Thus, even if our geodynamic model successfully explains Late Jurassic tectonic rotations, fault motions and facies distribution for the CEIM, the basic cause of the LCTE still remains enigmatic.