The southern part of the Central Ameriean isthmus is the product of an island arc. It evolved initially as a ridge of primitive island-arc tholeiites at a collision zone between the Farall6n plate and protoCaribbean crust (Albian-Santonian). During the Campanian. a major tectonic event (most probably subduction reversal) causcd decollement of differcnt units of the former plate margin. The rcsultmg structural high was covered by a carbonate platform. From Maastrichtian to Eocenc times continuous subduetion produced a stable morphotcctonic configuration (trench-slope-outer-arc-fore-arccalcalkaline-arc). Fore-arc sedimentation was controlled by volcaniclastic input and tectonic activity along the outer arc's inner margin. Eustatic control is essentially recognized through lowstand sIgnals such as extensive turbidite sand lobes. Steady accretionary uplift of the outer arc gradually closed the bypasses between fore-arc and trench slope. Eustatic control is verified by lowstand signals (sands) on the trench slope and highstand signals on the outer arc (carbonate ramps). During the Oligocene another major tectonic event affected the entire system: accretion ceased, segments decoupled, and regional compression resulted in general uplift and erosion. From latest Oligocene to Pliocene times, three episodes of tilting created a series of fault-angle depressions. Subsidence varies enormously among these basins. but sedimentation is largely shallow marine. Facies architecture reflects complex interactions between tectonic processes, changes in volcaniclastic sediment supply. and eustasy. Subsequently. very strong explosive volcanic activity resulted in excessive sediment input that overfilled most basins. The history of the island arc shows that tectonic processes largely controlled composition. distribution. and geometry of the major sedimentary units. Eustatic signals do indeed occur when they are expected, but may be considered as an overprint rather than a dommating factor.