During the re-mapping of the area for the Geological Atlas of Switzerland, a significant stratigraphic unconformity was discovered in the North Penninic (Valais) Bündnerschiefer and the Flysch series of the northern Prättigau. It separates different units of the Cretaceous Bündnerschiefer from the Palaeogene Flysch. We explain this observation by a basin conversion from extension to compression, which caused the initial deformation of the Bündnerschiefer in an accretionary wedge. Interlinked return-flow has created a new heterogeneous substrate for the flysch sediments and explains the different types of unconformities. The basin conversion coincided with high-grade metamorphism in the vicinity of the the South Penninic suture and the Austroalpine units, and the increased exhumation in the Austroalpine nappe stack. Detrital zircon dating confirms also a change from European to Austroalpine detrital sources in the flysch sandstones. We discuss a palaeotectonic model leading to hP/lT metamorphism of the Bündnerschiefer in the Late Eocene (c. 42 Ma). It appears that the flysch formations were also involved, but to a lesser degree by tectonic deformation from the late Early Eocene onwards, as the pervasive folding characteristic of the Bündnerschiefer is absent. This has been followed by a phase of S-directed backfolding. During the Oligocene and Miocene, more extensive deformation occurred by SE to NW compression and finally by probable westward thrusting and folding. Our main theme is the transition from passive to active continental margins, which in Alpine plate tectonic framework corresponds to the transition to flysch sedimentation by basin conversion. Our results show that the simultaneity of the transition from extension to compression, as indicated by the accumulation of flysch, shifted in time from south to north in the Alpine Tethys.