Abstract The Cenozoic intracontinental Teletsk basin in the Central Asian Altai Mountains is composed of a complexly structured northern and a more simple southern sub-basin. These sub-basins formed in two distinct kinematic stages when first the NNW-striking Teletsk- and then the NE-striking West-Sayan shear zones became reactivated in the Cenozoic under dominant NS-oriented horizontal compression. Although the entire Teletsk basin strikes roughly NS, the southern sub-basin is parallel to the NNW-trending, amphibolite facies Teletsk ductile shear zone, while the northern sub-basin is NS-striking and flanked by differently structured, greenschist facies basement. Basement reactivation closely controlled the southern sub-basin formation, but this is less clear for the northern sub-basin. Contrasts between northern and southern basement and the exclusive occurrence of pseudotachylytes along the margins of the southern basin are explored for their contribution to the formation of the Teletsk basin with two distinct sub-basins. In the ductile shear fabric of the basement flanking the southern sub-basin, concordantly interleaved pseudotachylytes and isolated breccia lenses reflect local brittle deformation along the ductile fabric. The genetic link between breccia lenses and pseudotachylyte occurrences was defined by microstructural investigation. It allows to explore their possible development in a dextral strike–slip zone. These rocks occur in a large fault-bounded segment of the basement. The geometry of the structures in the segment is comparable with a dextral strike–slip sidewall-ripout structure along the Teletsk shear zone. Seismic slip related to pseudotachylytes is attributed to the sudden stress release on the NNW-striking Teletsk shear zone, when the latter became unconstrained by reactivation of the NE-trending West-Sayan fault zone at its northern boundary. The boundary of the sidewall-ripout structure was reactivated as a large listric fault in a later stage. The northern sub-basins roughly develop along an NS strike and are assumed to reflect reactivation of the ductile shear zone underneath the variably structured greenschist facies basement outcropping along the flanks of the sub-basin.