On May 23, 1989, a great (MW=8.1) earthquake occurred in the Macquarie Ridge complex, south of New Zealand. The earthquake is one of the largest in the Macquarie Ridge complex this century, and represents the right-lateral strike-slip component of the motion between the Pacific plate and the Australian plate. Subduction initation appears to be presently occurring in the Macquarie Ridge complex, and it has been suggested that plate boundary strike-slip earthquakes in a transitional tectonic environment have a high stress-drop. We have investigated the source rupture process of the 1989 earthquake, using teleseismic P and SH waves. The best point source depth is 12 km below the ocean bottom. The deconvolved source time function is dominated by a single pulse with a large moment release (1.8¿1021 Nm) and a short duration (20 s). The moment rate increases slowly in the first 10 s of the rupture process, and is suddenly truncated at 20 s. There is no resolvable directivity to this sharp truncation, which given the temporal resolution of the data set, means that the spatial location of the sharp truncation is within approximately 50 km of the epicenter. The stress-drop and and average displacement may be as high as 370 bars and 36 m. These values are unusually high, and strongly support the suggestion that high stress-drop earthquakes are characteristic for transitonal tectonic environments. ¿ American Geophysical Union 1990