AbstractAnomalously overturned thrust faults, lineaments and segmentation causing cross‐cutting basement structures characterize the tectonic setting of Sikkim Himalaya. However, its seismotectonics is poorly constrained along with the speculated northward extension of the Dhubri‐Chungthang Fault Zone (DCFZ) causing segmentation. Here, we utilize the precise location of newly acquired local earthquake data and fault plane solutions using full‐waveform moment tensor inversion to better constrain seismically active zones. Transtensional shearing along the Main Himalayan Thrust in central Sikkim is possibly incited by fluid‐rich upper‐crust. Cessation of the mapped 20 km wide mid‐crustal seismogenic zone of DCFZ at Chungthang and its northward discontinuation into the Higher Himalayas is confirmed by the striking variation in focal mechanisms. Earthquakes along imbricated segments in the lower‐crust originate possibly in response to crustal shortening. Extensional shearing along the Moho triggers seismicity to the northwest of Sikkim. Such complex tectonic dynamics instigating persistent seismicity indicates high potential for future great earthquakes in Sikkim Himalaya.