We study the 1998 Bovec-Krn mountain (Slovenia) earthquake sequence by combining hypocenters relocation, strong motion inversion, digital elevation modelling and field geology. The main shock (MS=5.7), a 12 km right lateral strike-slip event on the Dinaric fault system, occurred on a sub-vertical fault plane. The rupture, confined between 3 and 9 km depth, with no evidence of surface faulting, propagated bilaterally within two structural barriers. The northwestern barrier is at the junction between Dinaric and Alpine structures where there is a sharp change in the geometry of faulting. The southeastern barrier is within the Dinaric system and its surface expression corresponds to the Tolminka-spring perched basin, a 1 km restraining stepover. At this site, the Bovec-Krn earthquake-fault overlaps with a 30 km strike-slip fault segment that is free of aftershocks and could be undergoing an increase of stress. This fault system represents the northern branch of the Idrija right-lateral fault. ¿ 2001 American Geophysical Union