The continental margin of Nicaragua and Costa Rica is characterized by significant lateral changes from north to south such as a decreasing dip of the slab, a decreasing magma production and a shift in the volcanic front. To investigate this transition, a joint on- and offshore local earthquake tomography was performed. Low P-wave velocities and high Vp/Vs ratios, indicative for hydration, were found in the upper-mantle and lowermost crust beneath the Sandino Basin. The mantle wedge hydration can be estimated to 2.5 wt. per cent beneath south Nicaragua. In contrast, the mantle wedge beneath north Costa Rica is weakly or not hydrated. The hydration leads to a local gap in the seismicity in Nicaragua. The lateral transition between the hydrated and non-hydrated areas occurs within a distance of about 10 km. This transition coincides with a change in the crustal thickness in the order of 5–10 km, thickening to the south, and in the tectonic regimes. The change in the tectonic regimes towards a stronger extension along the margin of Nicaragua could be the key for understanding the observations: the extension may support the opening of pathways for a wide zone of fluid migration and hydration through the overriding plate which are identified with areas of low Vp, high Vp/Vs and low seismicity.