This article focuses on the reinterpretation of well, seismic reflection, magnetic, gravimetric, surface wave and geological surface data, together with the acquisition of seismic noise data to study the Lower Tagus Cenozoic Basin tectono‐sedimentary evolution. For the first time, the structure of the base of the basin in its distal and intermediate sectors is unravelled, which was previously only known in the areas covered by seismic reflection data (distal and small part of intermediate sectors). A complex geometry was found, with three subbasins delimited by NNE‐SSW faults and separated by WNW‐ESE to NW‐SE oriented horsts. In the area covered by seismic reflection data, four horizons were studied: top of the Upper Miocene, Lower to Middle Miocene top, the top of the Palaeogene and the base of Cenozoic. Seismic data show that the major filling of the basin occurred during Upper Miocene. The fault pattern affecting Neogene and Palaeogene units derived here points to that of a polyphasic basin. In the Palaeogene, the Vila Franca de Xira (VFX) and a NNE‐SSW trending previously unknown structure (ABC fault zone) probably acted as the major strike‐slip fault zones of the releasing bend of a pull‐apart basin, which produced a WNW‐ESE to NW‐SE fault system with transtensional kinematic. During the Neogene, as the stress regime rotated anticlockwise to the present NW‐SE to WNW‐ESE orientation, the VFX and Azambuja fault zones acted as the major transpressive fault zones and Mesozoic rocks overthrusted Miocene sediments. The reactivation of WNW‐ESE to NW‐SE fault systems with a dextral strike‐slip component generated a series of horsts and grabens and the partitioning of the basin into several subbasins. Therefore, we propose a polyphasic model for the area, with the formation of an early pull‐apart basin during the Palaeogene caused by an Iberia–Eurasia plates collision that later evolved into an incipient foreland basin along the Neogene due to a NW‐SE to WNE‐ESE oriented Iberia–Nubia convergence. This convergence is producing uplift in the area since the Quaternary except for the Tagus estuary subbasin around the VFX fault, where subsidence is observed. This may be due to the locking or the development of a larger component of strike‐slip movement of the NNE‐SSW to N‐S thrust fault system with the exception of the VFX fault, which is more favourably oriented to the maximum compressive stress.