Muscovite 40Ar-39Ar dating of muscovite-quartz schist, eclogite and retrograde eclogite indicates an Indosinian orogenesis occurred at 220–240 Ma in the Lhasa terrane, which is caused by the closure of Paleo-Tethyan ocean basin and the following collision of the northern Lhasa terrane and southern Gondwana land. This Indosinian orogenesis is further confirmed by the regional sedimentary characteristics, magmatic activity and ophiolite mélange. This evidence suggests that the Indosinian orogenic belt in the Lhasa terrane is widely distributed from the Coqen county in the west, and then extends eastward through the Ningzhong and Sumdo area, finally turning around the eastern Himalayan syntaxis into the Bomi county. Based on the evolutionary process, the geological development of Lhasa terrane from early Paleozoic to early Mesozoic can be divided into seven stages. All of the seven stages make up a whole Wilson circle and reveal a perfect evolutionary process of the Paleo-Tethys ocean between the northern Lhasa terrane and southern Gondwana land. The Indosinian orogenisis is a significant event for the evolution of the Lhasa terrane as well as the Tibetan Plateau.