Knowledge of the regional crustal deformation and stress field is fundamental to understanding and constrain the ongoing evolution of Hovsgol basin, northwest Mongolia. The 2021 Mw 6.7 Turt earthquake provides an unprecedented opportunity to probe the local tectonic stress field and upper crust deformation. We investigate the coseismic surface displacements and invert fault slip models using Interferometric Synthetic Aperture Radar observations and teleseismic data. The mainshock occurred as a result of normal faulting with a right-lateral strike-slip component on an NW striking plane, which is consistent with the transtensive local stress field inverted from regional focal mechanisms. It is surrounded by transpressive and strike-slip stress fields proposed by previous studies indicating regional stress heterogeneity probably controlled by the distinct structure geometries in and around Hovsgol basin. Our results also suggest that the current deformation of the Hovsgol basin is dominated by half-graben forming. Seven historical strong earthquakes (M 7) may advance the 2021 Turt earthquake by ~12% recurrence interval, based on the assumption of equal stress release from recurrence earthquakes, meanwhile, the 2021 Turt earthquake may increase the potential seismic hazard on the neighbor Mondy and South Hovsgol faults, which deserves more attention.