The instrumental record of Bhutan is characterized by a lower seismicity compared to other parts of the Himalayan arc. To understand this low activity and its impact on the seismic hazard, a seismic network was installed in Bhutan for 22 months between 2013 and 2014. Recorded seismicity, earthquake moment tensors and local earthquake tomography reveal along-strike variations in structure and crustal deformation regime. A thickened crust imaged in western Bhutan suggests lateral differences in stresses on the Main Himalayan Thrust (MHT), potentially affecting the interseismic coupling and deformation regime. Sikkim, western Bhutan and its foreland are characterized by strike-slip faulting in the Indian basement. Strain is particularly localized along a NW-SE striking mid-crustal fault zone reaching from Chungthang in northeast Sikkim to Dhubri at the northwestern edge of the Shillong Plateau in the foreland. The dextral Dhubri-Chungthang fault zone (DCF) causes segmentation of the Indian basement and the MHT between eastern Nepal and western Bhutan and connects the deformation front of the Himalaya with the Shillong Plateau by forming the western boundary of the Shillong block. The Kopili fault, the proposed eastern boundary of this block, appears to be a diffuse zone of mid-crustal seismicity in the foreland. In eastern Bhutan we image a seismogenic, flat portion of the MHT, which might be either related to a partially creeping segment or to increased background seismicity originating from the 2009 M W 6.1 earthquake. In western-central Bhutan clusters of micro-earthquakes at the front of the High-Himalayas indicate the presence of a mid-crustal ramp and stress buildup on a fully coupled MHT. The area bounded by the DCF in the west and the seismogenic MHT in the east has the potential for M7-8 earthquakes in Bhutan. Similarly, the DCF has the potential to host M7 earthquakes as documented by the 2011 Sikkim and the 1930 Dhubri earthquakes, which were potentially associated with this structure.