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The Pejo fault in the Italian Eastern Alps is a major sinistral transtensional fault. It marks the boundary between basement units displaying contrasting thermal histories, with Alpine (i.e., Mesozoic–Cenozoic) cooling ages preserved in the footwall juxtaposed against Variscan (i.e., Carboniferous– Permian) age in the hanging wall. Structural investigations, together with fission-track analysis, confirm a Late Cretaceous age for the Pejo fault, which excludes any direct kinematic contribution of the Pejo fault to the late Oligocene–Neogene evolution of the central-eastern segment of the Periadriatic fault. However, our results establish the importance of a major early Oligocene north-south to north-northwest–south-southeast shortening phase in the Central-Eastern Alps, which resulted in the development of new reverse shear zones, in the reactivation of the Pejo fault with a reverse motion, and in regionally important folding. The Pejo mylonites are folded on a kilometer scale around an east-northeast–trending axis. Field observations and fission-track analysis suggest a post-Oligocene age for the folding phase. Apatite fission-track data in the Pejo valley area reveal the base of a fossil apatite partial annealing zone exhumed to the surface. This finding argues for >4 km of exhumation since the Miocene, which was related to a major pulse of exhumation that began at ca. 15 Ma. This study suggests that the simple distinction between largely pre-Alpine fabrics of Variscan age in the hanging wall of the Pejo fault (Tonale nappe) and Alpine fabrics (Cretaceous) in the footwall (Campo-Ortler nappe) is not universally valid. Alpine overprinting is confined to the mylonitic shear zone itself. Deeper into the footwall, pre-Alpine structures are still well preserved. Earlier maps and interpretations based on a clear distinction between Tonale and Campo should be viewed with caution.