In this paper we describe the tectonosedimentary evolution and its subsequent inversion of a basin that underwent extreme crustal thinning in a transtensional setting ahead of a propagating ocean in the western Pyrenees. The Labourd-Mauléon area situated in the western Pyrenees, at the termination of the V-shaped Bay of Biscay, is an ideal natural laboratory to study how such complex basins evolve in time and space. Because of a mild inversion of the basin during Pyrenean compression, the rift structures and their relations to basement rocks and sediments are exposed and can be directly studied in the field. The basin shows a complex polyphase evolution that starts with left-lateral dominated transtension in latest Jurassic–early Aptian time. This event is overprinted by a late Aptian–early Albian extension that is related to the counterclockwise rotation of Iberia away from Europe leading to the opening of the Bay of Biscay. During this stage, the Late Triassic to Jurassic carbonate platform was stretched, salt migrated, and detachment faults exhumed upper and lower crustal and mantle rocks to the seafloor. The final structure of the basin resembles a sag basin floored by exhumed rocks overlain by extensional allochthons and compartmentalized by N40° to N60° transfer faults. The sedimentary architecture is characterized by late Aptian synrift sediments (e.g., Urgonian limestones) that were deposited in fault-bounded basins and are overlain by thick latest Aptian to Albo-Cenomanian sediments (e.g., Flysch noir) that define a sag sequence. The complex tectonosedimentary evolution of the basin is associated with salt tectonics and overprinted by a major magmatic/thermal event that postdates mantle exhumation.