We use seismic reflection and rock sample data to propose that the first-order physiography of New Caledonia Trough and Norfolk Ridge formed in Eocene and Oligocene time and was associated with the onset of subduction and back-arc spreading at the Australia-Pacific plate boundary. Our tectonic model involves an initial Cretaceous rift that is strongly modified by Cenozoic subduction initiation. Hence, we are able to explain (1) complex sedimentary basins of inferred Mesozoic age; (2) a prominent unconformity and onlap surface of middle Eocene to early Miocene age at the base of flat-lying sediments beneath the axis of New Caledonia Trough; (3) gently dipping, variable thickness, and locally deformed Late Cretaceous strata along the margins of the trough; (4) platform morphology and unconformities on either side of the trough that indicate a phase of late Eocene to early Miocene uplift to near sea level, followed by rapid Oligocene and Miocene subsidence of similar to 1100-1800 m; and (5) seismic reflection facies tied to boreholes that suggest absolute tectonic subsidence at the southern end of New Caledonia Trough by 1800-2200 m since Eocene time. The Cenozoic part of the model involves delamination and subduction initiation followed by rapid foundering and rollback of the slab. This created a deep (>2 km) enclosed oceanic trough, similar to 2000 km long and 200-300 km across, in Eocene and Oligocene time as the lower crust detached, with simultaneous uplift and local land development along basin flanks. Disruption of Late Cretaceous and Paleogene strata was minimal during this Cenozoic phase and involved only subtle tilting and local reverse faulting or folding. Basin formation was possible through the action of at least one detachment fault that allowed the lower crust to either be subducted into the mantle or exhumed eastward into Norfolk Basin. We suggest that delamination of the lithosphere, with possible mixing of the lower crust back into the mantle, is more widespread than previously thought and may be commonly associated with subduction initiation, such as Cenozoic events in the Mediterranean and western Pacific.