The Pannonian Basin has been described as the type example of a Mediterranean back-arc basin where extension did not advance to the opening of an oceanic basin. In some of the sub-basins of this large basin complex the style of Neogene extensional deformation almost reached the stage of hyper-extension but it stopped short of exhuming lower crustal or mantle units at the basin floor. Continental extension terminated due to the space constraints provided by the docking of the surrounding Carpathian thrust-fold belt onto various divergent and transform margin segments of the European plate. Similarly to some other back-arc basins of the Alpine orogenic belt, the extension was triggered by an episode of continental escape. A part of the Alpine orogen was extruded towards the east during the Early Miocene and occupied the Jurassic oceanic Magura embayment of the European margin. Due to the removal from the Alpine collision zone the overthickened lithosphere collapsed during the Middle Miocene. The various modes of syn-rift extension, such as the metamorphic core complex, wide rift and narrow rift deformational styles are well constrained by exceptional large subsurface data sets acquired by the petroleum industry in the region for more than a century. The Late Miocene to Pliocene post-rift thermal subsidence saw the sedimentation of an unusually thick basin fill locally exceeding 8 km thickness compared to the typically much thinner syn-rift sequence not more than 2 km thick. This particular character of the Pannonian Basin can be understood in the source-to-sink evolution of the broader provenance area of the Carpathian-Pannonian system during the Neogene. Basin-scale inversion commenced during the Pliocene by eastward propagation of shortening across the Pannonian Basin due to the ongoing northward movement of the Adriatic promontory to SW. Locally, positive inversion occurred by the selective reactivation of pre-existing Alpine contractional elements. Since the neotectonic deformation of the Pannonian basin system is still in its infancy, it provides a very well-constrained template for other back-arc basins where this process may be much more advanced. The vast amount of reflection seismic and drill hole data sets in the Pannonian Basin, acquired during hydrocarbon exploration efforts for more than a century, qualify it as one of the best studied back-arc basins in the world.