Description: The breakup of Laurasia to form the Northeast Atlantic Realm disintegrated an inhomogeneous collage of cratons sutured by cross-cutting orogens. Volcanic rifted margins formed that are underlain by magma-inflated, extended continental crust. North of the Greenland-Iceland-Faroe Ridge a new rift–the Aegir Ridge–propagated south along the Caledonian suture. South of the Greenland-Iceland-Faroe Ridge the proto-Reykjanes Ridge propagated north through the North Atlantic Craton along an axis displaced ~150 km to the west of the rift to the north. Both propagators stalled where the confluence of the Nagssugtoqidian and Caledonian orogens formed an ~300-km-wide transverse barrier. Thereafter, the ~150 × 300-km block of continental crust between the rift tips–the Iceland Microcontinent–extended in a distributed, unstable manner along multiple axes of extension. These axes repeatedly migrated or jumped laterally with shearing occurring between them in diffuse transfer zones. This style of deformation continues to the present day in Iceland. It is the surface expression of underlying magma-assisted stretching of ductile continental crust that has flowed from the Iceland Microplate and flanking continental areas to form the lower crust of the Greenland-Iceland-Faroe Ridge. Icelandic-type crust which underlies the Greenland-Iceland-Faroe Ridge is thus not anomalously thick oceanic crust as is often assumed. Upper Icelandic-type crust comprises magma flows and dykes. Lower Icelandic-type crust comprises magma-inflated continental mid- and lower crust. Contemporary magma production in Iceland, equivalent to oceanic layers 2–3, corresponds to Icelandic-type upper crust plus intrusions in the lower crust, and has a total thickness of only 10–15 km. This is much less than the total maximum thickness of 42 km for Icelandic-type crust measured seismically in Iceland. The feasibility of the structure we propose is confirmed by numerical modeling that shows extension of the continental crust can continue for many tens of millions of years by lower-crustal ductile flow. A composition of Icelandic-type lower crust that is largely continental can account for multiple seismic observations along with gravity, bathymetric, topographic, petrological and geochemical data that are inconsistent with a gabbroic composition for Icelandic-type lower crust. It also offers a solution to difficulties in numerical models for melt-production by downward-revising the amount of melt needed. Unstable tectonics on the Greenland-Iceland-Faroe Ridge can account for long-term tectonic disequilibrium on the adjacent rifted margins, the southerly migrating rift propagators that build diachronous chevron ridges of thick crust about the Reykjanes Ridge, and the tectonic decoupling of the oceans to the north and south. A model of complex, discontinuous continental breakup influenced by crustal inhomogeneity that distributes continental material in growing oceans fits other regions including the Davis Strait, the South Atlantic and the West Indian Ocean.