The 1 6 September 1994 earthquake, with its epicenter located r-vl50 km southwest of Taiwan in the western part of the Tainan Basin, has been the largest event (m.b=6.5) in the Taiwan Strait in modern history. There were several known large historical earthquakes in the Taiwan Strait, but in the epicentral area there was no known historical seismicity and the present da}r seismicity is not noticeably higher than in other area of the Strait. The focal mechanism of this event (strike, 103±17; dip, 55±5; rake, -74± 1 6) is obtained by inverting both teleseismic P and S'H waveforms. The solution is a high-angle, normal fault with the two nodal planes striking approximately east-west, implying north-south extension in the source region. The estimated centroid depth is 13±3 km, consistent \-\'ith that reported in the Preliminary Determination of Epicenter (PDE). The source time function is a very simple triangle of only 2.4 s in duration, and the seismic moment is 7.0±1.1 x 1018 Nt m. Based on the aftershock distribution, we infer that the earthquake probabl}· took place along the south-dipping nodal plane. However, due to the large uncertainty in the hypocentral locations of aftershocks, the precise geometry of the rupture area is not resolvable. By assuming the densest aftershock zone to be the rupture area (rvl5 km long by 20 km wide), the inferred stress drop is rv33 bar. On the other hand, the calculated stress drop is as high as 3.8 kbar if it is assumed that the rupture area is the square of the product of the half duration of the source time function and the rupture velocity (Kikuchi and Fukao, 1988). The corner frequency of the displacement spectrum recovered by the broadband seismogram recorded at a close-in station (PNG) is consistent with the higher stress drop. Nonetheless, lower values cannot be completel)' ruled out. We interpret the earthquake as a consequence of the northsouth extension perpendicular to the a-1 for the arc-continent collision near Taiwan. An analogous extensional environment is found in the high Tibet plateau north of the Himalayan collision zone. It is concluded that normal faults in the Tainan Basin are active and capable of generating large earthquakes. After the initial rifting stage and later post-rift phase of thermal subsidence, the Tainan Basin is now in a sy n-collisional stage not asimilar to that in the Tibet plateau.