The late Cenozoic extensional basins in Yunnan Province (southwestern China), which are kinematically linked with the regional strike-slip faults, can provide meaningful constraints on the fault activity history and tectonic evolution of the southeast margin of the Tibetan Plateau (SEMTP), and further on the geodynamic evolution of the Tibetan Plateau. However, this has been severely impeded by the lack of precise age constraints on the timing of fault activity. To better constrain the timing of fault activity and the tectonic rotation of SEMTP, we undertook a high-resolution magnetostratigraphic study on the Xiaolongtan Formation in the Xiaolongtan Basin, which is located at the southern tip of the Xianshuihe-Xiaojiang fault and is well-known by the presence of hominoid Lufengpithecus keiyuanensis. Rock magnetic experiments indicate that magnetite is the main remanence carrier. Correlation to the geomagnetic polarity timescale was achieved by combining magnetostratigraphic and biostratigraphic data. Our correlation suggests that the Xiaolongtan Formation sedimentary sequence spans from Chron C5Ar.1r to Chron C5n.2n, which indicates that the age of the Xiaolongtan Formation ranges from 10 Ma to 12.7 Ma, and that the ages of the two sedimentary layers possibly bearing the hominoid L. keiyuanensis are~11.6 Ma or~12.5 Ma. The basal age of the sediments is 12.7 Ma, which indicates that the activation of the southern Xianshuihe-Xiaojiang fault was initiated at this time. The overall mean paleomagnetic direction (D = 353.2°, I = 34.2°, α 95 = 2.1°, n = 166) documents a counter-clockwise vertical axis rotation of −8 ± 3°with respect to Eurasia, which is the response to the activity of the left-lateral Xianshuihe-Xiaojiang Fault.