Crust underlying the Island of Rhodes is part of the forearc of the eastern Hellenic subduction zone. Deformation of the forearc rocks appears to be influenced by oblique plate convergence, subduction roll-back and horizontal-axis rotation, the relative importance of these processes is not well known. The southeast coast of Rhodes hosts Pliocene to Pleistocene marine strata, attributed to fault-controlled basin formation. However, it is poorly understood how faulting is intertwined with deposition of marine strata and how basin formation relates to the first-order tectonic processes. To examine these relationships in detail, the Lardos area was selected, due to its excellent exposure of marine sedimentary strata and fault scarps. Neotectonic deformation on multiple scales was assessed employing satellite- and drone-based imagery, differential GPS as well as lithological and structural mapping. Collectively, these observations point to the following sequence of tectono-sedimentary stages of basin formation: Normal faulting initiated the Pre-Pleistocene graben formation. Based on the occurrence of the sedimentary breccia along the fault scarps and displaced Pleistocene marine terraces, graben-bounding normal faults continued to be active during and after the Pleistocene. Faulting affected Pre-Pleistocene carbonate rocks and the unconformably overlying Pleistocene marine sedimentary strata. During uplift of the southeast coast of Rhodes, marine terraces formed and reshaped the paleo relief. Graben formation can be attributed to overall ENE-WSW, i.e., plate boundary-parallel, extension of the forearc rocks. This extension direction can be explained by increasing crustal stretching along the forearc as a consequence of progressive tightening of the curved Hellenic subduction zone.