As the north‐eastern margin of the North China Block, the Liaodong Peninsula has undergone multiple tectonic events during the Mesozoic, as well as simultaneous large‐scale gold mineralization. In this study, we focus on the history of Early Cretaceous basin formation, during the interval of time prior to and during a major extensional tectonic event that is characterized by formation of metamorphic core complexes (MCCs), detachment faults, and half‐graben basins. Two representative Early Cretaceous basins, the Tongyuanpu and Fangjiaweizi basins, expose two parts of the Xiaoling Formation (K1x); these two sequences, K1x1 of the Tongyuanpu Basin and K1x2 of the Fangjiaweizi Basin, were selected for detailed sedimentary and geo- chronological study. Both the K1x1 and K1x2 are dominated by sedimentary sequences of fluvial facies clastic rocks to volcani‐clastic and volcanic rocks. Clastic and volcanic rock samples, including three samples from the K1x1, four samples from K1x2, and one mafic dyke sample, were analysed for U–Pb on zircon, to constrain the crystallization ages for volcanic units and maximum deposition age (MDA) for clastic units. The zircon U–Pb age results date the K1x1 at ~135–127 Ma, while the K1x2 at ~127–122 Ma. Comparing the detrital zircon age peaks with the main potential source areas, provenance of both the K1x1 and K1x2 units was mainly from igneous rocks in the Liaodong Peninsula. Integrating our observations from the Tongyuanpu and Fangjiaweizi basins with those from other basins in the Liaodong Peninsula, we suggest south‐westward basin migration during the transition from transpressional basin formation to development of back‐arc extension basin. This basin migration responded to the tectonic transition from sinistral strike‐slip motion on the Tan‐Lu Fault to the rollback of the Paleo‐Pacific Plate coinciding with formation of MCCs. This tectonic transition and basin migration is important for understanding the transi- tion from compression to extension in the eastern North China Block during the Early Cretaceous.