The Dinevar transtensional pull-apart basin is a NW–SE trending basin located in the northwest part of the Zagros Mountains, Sanandaj–Sirjan tectonic zone, Iran. This basin was formed by oblique extension in a strike-slip fault system, which was controlled by the pre-existing Sahneh and the Mianrahan faults. In addition to a field study, we constructed a 2D finite element elastic model based on the major fault segments. According to the field study, various geological structures are formed around the pre-existing fault segments, including pencil structures with 13 < aspect ratio < 19, tight to open asymmetric folds, oblique–normal faults, synthetic and antithetic faults, normal and reverse fault drags, and negative and hybrid-type flower structure. FE-model results show that around the fault step is a zone of displacement gradient that indicates extension (transtension) within the overlapping zone. Consequently, subsidence is predicted over the releasing fault step. The modelled stress distributions within the fault step and around the fault segment tips are asymmetric. Elastic modelling shows that the mean normal stress within the step is tensional, which would impede plastic yield, while the region outside the step is characterised by compressive mean normal stress. The mean normal stress pattern is characterised by a regional minimum, localised inside the extensional step (transtension zone), and two local maximum and minimum couples, formed at the advancing and retreating sides, respectively, in the fault segment tips. The results show that two main subsidence regions (depocentres or sub-basins) form along and in the proximity of the fault segment tips. The imposed relative motion is entirely accommodated by creep on the faults, which causes plastic strain to accumulate outside the faults, mostly localised within the fault step. This localised strain between fault segments could initiate connecting faults or reactivate earlier faults, generally at high angles relative to the master fault segments as suggested by the stress and strain patterns. The rotation and magnitude variation in the stress and strain trajectories reflects heterogeneous deformation. In general, the Dinevar transtensional pull-apart basin is characterised by an elongate rhomboidal- to trapezoidal-shaped geometry. The modelled stress distribution and strain localisations within the basin are in general agreement with the locations of fault segments within the Dinevar transtensional pull-apart basin.