The present paper provides new petrographic and geochemical insights into the tectonic and depositional environment of the Late Cretaceous volcaniclastic deposits from the Hateg Basin, in the South Carpathians. These deposits are widespread in the Rachitova–Stei unit, which is tectonically delimitated from the South Carpathians' geological background by strike-slip faults. The conducted petrographic studies have revealed that the volcaniclastic rocks from the Rachitova–Stei unit are mainly pyroclastic (i.e. coarse tuffs, tuff-breccia and tuffites), with a wide variety of volcanic pyroclastic fragments, most commonly including andesites (amphibole andesites, biotite-bearing-amphibole andesites, pyroxene-bearing-amphibole andesites, pyroxene-andesites), and less frequently latite-andesites, latites, rhyolites and dacites. The rhyolites are found only in the lower sequence of the Rachitova–Stei unit. The volcaniclastic deposits were altered by diagenetic processes. The celadonite is the most common diagenetic mineral formed in these rocks, whose presence indicates that the pyroclastic fragments have interacted with sea water. The high percentage of pyroclastic fragments with mainly angular forms and the rich-hornblende content evidence a highly explosive volcanism. The poorly-sorted pyroclastic assemblages with larger blocks and with little reworked pyroclastic material indicate a very short distance of transportation and a deposition relatively close to the explosion centre. The huge quantity of pyroclastic material from the Rachitova–Stei unit suggests that the volcanic explosion had a centre of considerable dimensions, but there is no evidence of such a volcano neither in the Hateg Basin nor anywhere else in the South Carpathians. The whole-rock geochemical composition and the immobile trace element signature from the pyroclastic fragments indicate an island arc depositional environment that was placed close to an active continental margin. In addition, the andesitic nature of the pyroclasts indicates that the volcaniclastic rocks were most probably derived from a magma generated by the subduction of an oceanic plate under a thin continental plate. The presence of the non-volcanic pyroclasts (i.e. granites, quartz-muscovite schists, muscovite quartzites, graphitic phyllites etc.), detached from the continental crust by explosion, confirms that the overriding plate is of continental material. The presence of the rhyolitic magma in the first stage of eruption also supports the continental nature of the overriding plate, the magma having resulted by the partial melting of the rocks from the continental crust. The petrographic and geochemical data have evidenced that the volcanism took place on a thin continental crust. However, this crust is not characteristic to the Getic Unit from the South Carpathians, which is commonly accepted to represent the basement of the Hateg Basin. Most probably, the volcanism was generated in another geotectonic context, respectively, in a continental island arc with a thin overriding crust, most likely situated at a lower latitude. The volcaniclastic units of the Hateg Basin were displaced and moved from this tectonic context to the present location by strike-slip movements.