It has long been recognized that the Late Palaeozoic evolution of SW Iberia preserves a record of terrane accretion, collision and suturing between Laurussia (South Portuguese Zone) and Gondwana (Ossa Morena Zone), which is one of the key events in the development of the Variscan orogen and the amalgamation of Pangea. The suture zone (Pulo do Lobo Zone) is classically considered to be an accretionary complex and is characterized by an assemblage of greenschist facies, polydeformed and imbricated meta-sedimentary rocks, mélanges and mafic complexes. However, recent work has shown some of the metasedimentary rocks and mélange were probaby derived from neither the upper nor the lower plates. Mafic complexes in the mélange have NMORB compositions, highly depleted Sm-Nd isotopic signatures and geochronological data imply that their protoliths probably formed prior to c. 354 Ma. Geochronological data also imply that components of the mafic mélange contain a volumetrically minor amount of ancient continental detritus. The Pulo do Lobo Zone together with the two bounding units (South Portuguese and Ossa Morena zones) were also intruded by c. 360-310 Ma composite plutons and related dykes ranging from gabbro to granite in composition. The oldest phases of these intrusions are syn-to late-tectonic with respect to the deformation. Taken together these recent observations suggest that much of the tectonic evolution of the Pulo do Lobo Zone post-dates the onset of collisional tectonics elsewhere in the Variscan orogen, suggesting that its evolution was dominated by subduction in relatively narrow tracts of oceanic lithosphere. This scenario may be broadly analogous to the complex Cenozoic tectonic evolution of the eastern Mediterranean oceanic tracts relative to the ongoing collision between the African, Eurasian and Arabian plates.