Magnetostratigraphy of sedimentary rock deposited in the Chaka basin (north‐eastern Tibetan Plateau) indicates a late Miocene onset of basin formation and subsequent development of the adjacent Qinghai Nan Shan. Sedimentation in the basin initiated at ∼11 Ma. In the lower part of the basin fill, a coarsening‐upward sequence starting at ∼9 Ma, as well as rapid sedimentation rates, and northward paleocurrents, are consistent with continued growth of the Ela Shan to the south. In the upper section, several lines of evidence suggest that thrust faulting and topographic development of the Qinghai Nan Shan began at ∼6.1 Ma. Paleocurrent indicators, preserved in the basin in the proximal footwall of the Qinghai Nan Shan, show a change from northward to southward flow between 6.5 and 3.8 Ma. At the same location, sediment derived from the Qinghai Nan Shan appears at 6.1 Ma. Finally, the initiation of progressively shallowing dips observed in deformed basin strata and a change to pebbly, fluvial deposits at 6.1 Ma provide a minimum age for the onset of slip on the thrust fault that dips north‐east beneath the Qinghai Nan Shan. We interpret a decrease in sediment accumulation rates since ∼6 Ma to indicate a reduction in Chaka basin accommodation space due to active faulting and folding along the Qinghai Nan Shan and incorporation of the basin into the wedge‐top depozone. Declination anomalies indicate the beginning of counter‐clockwise rotation since 6.1 Ma, which we associate with local deformation, not regional block rotation. The emergence of the Qinghai Nan Shan near the end of the Miocene Epoch partitioned the once contiguous Chaka‐Gonghe and Qinghai basin complex. In a regional framework, our study adds to a growing body of evidence that points to widespread initiation and/or reactivation of fault networks during the late Miocene across the north‐eastern Tibetan Plateau.