An eleven-month deployment of 25 ocean bottom seismometers provides an unprecedented opportunity to study low-magnitude local earthquakes in the complex transpressive plate boundary setting of the Gulf of Cadiz, known for the 1755 Lisbon earthquake and tsunami. 36 relocated earthquakes (ML 2.2 to 4.8) concentrate at 40-60 km depth, near the base of the seismogenic layer in ∼140 Ma old oceanic mantle lithosphere, and roughly align along two perpendicular, NNE-SSW and WNW-ESE striking structures. First motion focal mechanisms indicate compressive stress for the cluster close to the northern Horseshoe fault termination which trends perpendicular to plate convergence. Focal mechanisms for the second cluster near the southern termination of the Horseshoe fault indicate a strike-slip regime, providing evidence for present-day activity of a dextral shear zone proposed to represent the Eurasia-Africa plate contact. We hypothesize that regional tectonics is characterized by slip partitioning. © 2010 by the American Geophysical Union.