The offset of geological bodies provides robust evidence of displacement along a fault or ductile shear zone. The amount of displacement along the Xuelongshan–Diancangshan–Ailaoshan structural system, southeastern Tibetan Plateau, is uncertain because of the lack of offset geological markers. This NNW–SSE-trending system is developed in three isolated metamorphic complexes and interjacent nonmetamorphosed rocks. They are expected to record similar post-Eocene strain, although their structural patterns should be distinct. Geological mapping in the area between the Xuelongshan and Diancangshan metamorphic complexes has revealed a small Eocene basin, the Madeng Basin, located to the west of the structural system. The sedimentary and volcanic successions of the Madeng Basin are comparable to those of the Jianchuan Basin, which is located to the east of the structural system. Zircon U–Pb geochronological and bulk geochemical data demonstrate that the volcanic rocks of both basins formed during 37–34 Ma and share the same geochemical features. These data suggest that the Madeng and Jianchuan basins previously constituted a single basin, with the distribution of high-K volcanic rocks in the basins defining an ENE–WSW-trending volcanic belt that shows a limited dextral offset of ≤20 km across the Xuelongshan–Diancangshan–Ailaoshan structural system. Therefore, the northern segment of the structural system records no evidence of large-scale lateral movement/displacement. The results suggest that the Indochina block, which is bounded by the Xuelongshan–Diancangshan–Ailaoshan structural system to the east and the Sagaing Fault to the west, has not extruded southward as a whole but rather has been deformed by pervasive crustal shortening.