We report paleomagnetic results from 12 Plio-Pleistocene localities in the actively colliding Finisterre Arc Terrane of northeastern Papua New Guinea (PNG). Calcareous, hemipelagic cover rocks possess a stable, syn-collisional remagnetization indicating a clockwise rotation of the colliding terrane through about 40° in post-Miocene time. A decrease in paleomagnetic declination anomalies as a function of along-strike distance in the Finisterre Arc Terrane, analyzed by our preferred model of a linear remagnetization and a migrating Euler pole, suggests an average rotation rate of 8° Ma −1, in good agreement with the instantaneous rate from global positioning system geodesy. Thus, we propose that this rotation results from a coherent, rigid-body rotation of the Finisterre Terrane rather than from sequential docking of independently colliding blocks of the terrane. Moreover, we conclude that these paleomagnetic declinations result mainly from South Bismarck Plate motion, and not decoupled rotation of the crustal terrane independent of the underlying lithosphere. We examine models of a syn-collisional remagnetization with both fixed and migrating Euler poles of South Bismarck/Australia plate relative motion, and suggest that the Euler pole describing South Bismarck Plate motion has migrated southwestward to its present location on the collision suture in response to the propagating collision. This plate kinematic model agrees with the variability in depth of the seismogenic slab beneath the collision zone. Our best-fit model of pole migration describes South Bismarck/Australia relative motion producing a highly oblique collision in its early stages, with the Finisterre Arc Terrane converging along a left-lateral Ramu-Markham suture, gradually changing to the nearly orthogonal convergence observed today.