An east-west-trending ductile shear zone was found in Chaganchulu, about 6.5 km north of the main ore of Bayan Obo Fe-Nb-REE deposit, Inner Mongolia, North China. Previous researchers just found an ophiolite m lange along the broad W-E trending valley. The authors of this paper discovered a series of ductile deformation structures at a mylonitic marble hill in the east of the zone. The ductile deformations include stretching lineations, sheath folds and rotated porphyroclasts, etc. Some crenulation cleavages and deformed calcite veins were also observed in the metamorphic quartz sandstone. Abundant macro pressure shadow structures are visible around quartzite. Meanwhile, pyrite-type pressure shadow was also recognized in the north of the belt. Judged from the above-mentioned characteristics, the Chaganchulu region is an east-west-trending ductile shear belt characterized by NEE—SWW sinistral strike-slip thrust. These indicate the preliminary pattern fact that the zone formed from convergence between the fossil Mongolian Ocean and the North China Plate in the Late Paleozoic time.