After a rapid multiphase evolution and a transition from passive to active rifting during late Early Miocene to Pliocene times, the Pannonian Basin has been subjected to compressional stresses leading to gradual basin inversion during Quaternary times. Stress modelling demonstrates the significance of the interaction of external plate-boundary forces and the effect of gravitational stresses caused by continental topography and crustal thickness variation. Flexural modelling and fission-track studies have elucidated the complex interplay of flexural downloading during collision, followed by rapid unroofing by unflexing and isostatic rebound of the lithosphere. The stretching and subsidence history of the Pannonian Basin, the temporal and spatial evolution of the flexure of the Carpathian lithosphere, and the lithospheric strength of the region reflect a complex history of this segment of the Eurasia-Africa collision zone. The polyphase evolution of the Pannonian-Carpathian system has resulted in strong lateral and temporal variation in thermomechanical properties in the area. Modelling results suggest that, as a whole, the Pannonian Basin has been an area of pronounced lithospheric weakness since Cretaceous time, shedding light on the high degree of strain localization in this region. This basin, the hottest in continental Europe, has a lithosphere of extremely low rigidity, making it prone to multiple tectonic reactivations. Another feature is the noticeable absence of lithospheric strength in the mantle lithosphere of the Pannonian Basin. Modelling studies suggest pronounced lateral variations in lithospheric strength along the Carpathians and their foreland, which have influenced the thrust load kinematics and post-collisional tectonic history. The inferences and models discussed in this paper are constrained by a large geophysical database, including seismic profiles, gravity and heat-flow data. © The Geological Society of London 2006.