The inversion of ~1000 fault slip data collected in the Flateyjarskagi Peninsula allows reconstruction of four main tectonic regimes. These include normal and strike-slip faulting modes and are related to the general behavior of the Husavik-Flatey Fault (HFF), a major structure of the Tj¿rnes Fracture Zone connecting the Kolbeinsey Ridge and the North Icelandic Rift. The two most important regimes (E-W and NE-SW extensions), consistent with the right-lateral motion along the Husavik-Flatey Fault, constitute the main tectonic group. The two others (NW-SE and N-S extensions), forming the subordinate tectonic group, are incompatible and result from drastic stress permutations. The relationships between these stress regimes imply not only &sgr;1/&sgr;2 and &sgr;2/&sgr;3 stress permutations but also &sgr;1/&sgr;3 reversals. A critical review of other data available, such as lava bedding, dike, and major fault attitudes, allows us to complete the structural pattern of the Flateyjarskagi peninsula and to highlight the mechanism of the transform zone. The complex pattern of dikes and faults in the northern part of Flateyjarskagi can be explained by the superposition of several processes: (1) a transform-perpendicular extension (E-W to ESE-WNW trends), (2) a simple shear (NNE-SSW to NE-SW trends), and (3) a stress perturbation due to the transform motion (NW-SE trends). An important factor controlling the transform mechanism is the variation of coupling along the HFF. The obliquity between the direction of transform motion and the trend of extension for the two main regimes may vary between 20¿ and 90¿, reflecting repeated changes of the coefficient of friction along the HFF. Such change from very low mechanical coupling (weak fault) to moderate friction may occur very rapidly since it takes place several times in a few years, as shown by focal mechanisms of earthquake analysis. ¿ 2000 American Geophysical Union