The northeastern North Atlantic evolved in the following three stages: (1) 54-44 Ma, initial separation, (2) 44-26 Ma, separation of Jan Mayen microcontinent from Greenlnd with complementary fan-shaped spreading on both sides, and (3) 26 Ma to present, spreading about a single axis passing west of the microcontinent. Poles of rotation for each stage have been relined, and the plate tectonic evolution of the Icelandic transverse ridge in relation to adjacent regions has been reconstructed. During the early stage the Iceland-Faeroe Ridge and the complementary east Greenland shelf were formed. The Faeroe transform fault separated the region from the Norwegian Sea and the spreading axis jumped westward prior to anomaly 22. During the intermediae stage, the line of the Faeroe transform fault enabled the Jan Mayen microcontinent to slide out, with the development of a ridge-ridge-transform triple junction which migrated westward, and the formation of a wedge-shaped region of crustal accretion joining the triple junction to the Aegir Ridge. The Greenland-Iceland Ridge eastward of the shelf break and most of the Vestfirdir region of Iceland were formed during this stage. At the start of the last stage, the Reykjanes and Kolbeinsey spreading axes became joined by a new split which formed an eastward bulging embayment across the Icelandic transverse ridge approximately coincident with the eastern edge of the insular shelf of Iceland. The asymmetrical shape of Iceland itself, and of the whole transverse ridge, is explained by this reconstruction.