The tectonics of the Virgin Islands Basin are controlled by the plate boundary between the Puerto Rico-Virgin Islands Microplate and the stable part of the Caribbean Plate. Several contradicting theories about the formation and development of this basin have previously been proposed. As part of the Danish Galathea 3 expedition, extensive marine geological investigations of the basin were carried out in March 2007 including sediment coring and acquisition of multi-beam and two-dimensional seismic data. This paper represents a summary of the key observations from the multi-beam and the seismic data set. The interpretation of these observations leads to the proposition of a tectonic model for the Virgin Islands Basin. The model consists of N–S to NW–SE directed extension combined with E-W trending sinistral strike-slip and the new structural evidence from the Virgin Islands Basin is entirely consistent with the most recently published GPS data.