On 31 March 2001 a fast solar wind transient with strong southward interplanetary magnetic field Bz produced a large geomagnetic storm at Earth, with a drop in the Dst index to -350 nT between 0400 and 0900 UT. The Earth's magnetosphere was very compressed during this interval, with the bow shock crossing geosynchronous orbit on at least two occasions. Here we present space-based and ground-based observations demonstrating that tail currents, rather than ring currents, were the dominant contributor to the Dst index during the main phase of this storm. The plasma sheet during this interval was exceptionally dense and penetrated very deeply towards the Earth, leading to extremely strong tail currents flowing quite close to the Earth. These tail currents produced a very distorted magnetosphere, with strong stretching of the magnetic field lines in the nightside plasma sheet. Energetic neutral atom (ENA) images from the MENA and HENA instruments on IMAGE show a very narrow spatial distribution, with ENAs confined to the nightside until a magnetic field dipolarization at ~0630 UT when Dst was -250 nT. Ground magnetometer measurements confirm that the disturbance was localized on the nightside and dominated by tail currents up until the field dipolarization. Following the dipolarization, higher energy ENAs began to drift toward dusk, forming a partial ring current. Even at that time, low-energy ENAs were not observed on the dayside, either due to inhibited access or to strong charge exchange losses.