A large active extensional fault is characterized, which will contribute to improve seismic hazard assessment in an intraplate region of the Mediterranean domain whose seismic potential until today has been underestimated. The Cucalón-Pancrudo fault (CPF) is a NNW-SSE striking extensional fault that represents the negative (extensional) inversion of a previous, Late Variscan and Paleogene, transpressional fault. It is part of the Río Grío-Pancrudo fault zone, the largest active structure in the intraplate central-eastern Iberian Chain. This study focuses on characterizing the CPF structure, morphotectonics and paleoseismology. The fault offsets a well-known regional planation surface (lower level of the Fundamental Erosion Surface, FES3, 3.5 Ma), providing a basis for calculating the maximum fault throw (c. 280–300 m, including the contribution of a minor synthetic fault and a gentle accommodation monocline), and hence estimating the net slip (c. 305–325 m) and the long-term slip rate (0.09 mm/a). A trench dug in a Holocene fluvial terrace reveals an ensemble of listric, domino-style ruptures synthetic to the main fault. They were activated during at least two paleoseismic events (X, Z), 14.9 ± 1.4 ka and 6.9 ± 0.4 ka in age. An intermediate event (Y), dated to 11.0 ± 1.0 ka, as an uncertainty because the attribution of their ruptures to event Z cannot be ruled out. The total net slip accumulated during these events (1.15–1.25 m) provides an apparent short-term slip rate of 0.07–0.09 mm/a, very similar to the long-term slip rate. Nevertheless, it is very likely that the faults exposed in the surveyed trench do not represent a complete paleoseismic record. Therefore, the actual slip rate during Late Pleistocene-Holocene times could be significantly higher, approaching that reported for most of the recent extensional faults in the central Iberian Chain. The inclusion of CPF in the map of Active Faults of Iberia (QAFI database) will result in improving seismic hazard assessment in Spain.