Abstract: There are several Cenozoic basins on the southeastern margin of the South China Sea, the tectonic-depositional response of which bears a great deal of geological information on the evolution of the sea and basins. Formed by the end of the Middle Miocene, the interface S3 is an insufficiently studied and controversial interface formed within the thermal subsidence stage. Constrained by well data, and combined with the interpretation of 2D seismic profiles crossing the Liyue and Palawan sub-basins, this paper systematically described the characteristics of the S3 interface, including lithology, seismic-sedimentary facies, tectonic subsidence rate, and migration of depocenters. This interface is marked by a prominent seismic reflector and can be traced over a large area in the study area. It also has different features on various tectonic elements. For example, the seismic expression is an angular truncation unconformity on the shelf of Palawan and part of Dangerous Grounds, whereas the interface is a continuous high amplitude reflection and has conformity contact, partially overlapped by incised channel deposits in the bathyal-abyssal area of Liyue and Palawan sub-basins. What's more, an abrupt change in lithological and sedimentary facies was observed on the northwest/southwest Palawan shelf and slope region, indicating a change from bathyal-abyssal facies to shallow marine facies. The S3 surface also marks an end of the rapid subsiding stage of Middle Miocene, evidenced by a decreasing subsiding rate that might be related with the deep geodynamic regimes after the seafloor spreading of the South China Sea. Based upon the detailed correlation of biostratigraphy of the unconformity, we propose that this interface probably developed at ca. 12 Ma due to the peak continent-arc collisional event between the Philippine Mobile Belt and the Palawan block. The observed gravity flow deposits on the S3 interface are probably linked with the dramatic sea-level fall since 12.5 Ma, which directly triggered the delivery of sand-rich or carbonate-rich sediments into the deep water.