This paper provides a review of the evolution of palaeomagnetic directions and sequence of tectonic events in the European Variscan belt during Late Palaeozoic times. These data are correlated with palaeomagnetic records from Gondwana and Baltica in order to provide a large-scale geodynamic framework during the Carboniferous to Permian. The Early Carboniferous palaeomagnetic records reported mainly from the Rhenohercynian and Saxothuringian magmatic arcs indicate a 70° anticlockwise rotation, while Late Carboniferous to Permian magnetic directions from various rocks of western and central Europe are consistent with 120° clockwise rotation of the eastern and central parts of the Variscan belt. Our review of the chronology of tectonic events is based on a robust database of geochronologically constrained deformation, metamorphic and magmatic events, which allow discretizing the 80 Ma long orogenic evolution into five principal events. In this scenario, the Variscan belt can be regarded as a linear sub-plate, isolated from Gondwana and Laurussia by the Rhenohercynian and Palaeotethysian oceans during Devonian times. This linear composite belt was segmented by transform faults and boundaries in the Late Devonian to Early Carboniferous times (360–335 Ma) during progressive E–W closure of Rhenohercynian ocean synchronously with collision between Saxothuringian and Moldanubian blocks. Subsequent relocation of subduction to the northern boundary Palaeotethysian ocean was responsible for N–S shortening almost orthogonal to the ancient sub-plate N–S elongation at around 335–325 Ma. This deformation resulted in dextral reactivation of transform boundaries associated with anticlockwise rotation of intermittent blocks. At the end of this rotation, the faults were parallelized to the Teysseire-Tornquist zone – the southern margin of Baltica, while the lozenge-shaped blocks of the former Variscan sub-plate were further shortened during continuous contraction. This evolution can fully explain the ≈ 70° anticlockwise rotation from Cn3 to Cn2 palaeomagnetic directions, which are regarded as successive Carboniferous magnetizations. Subsequently, the Variscan belt suffered a giant transtensional event from 325 to 310 Ma that was related to the development of extensional syn-magmatic core complexes over the whole belt and significant dextral reactivation of earlier NW–SE trending transform faults. This extensional event was associated with important tilts recorded by Cp magnetic overprint resulting from a major thermally induced remagnetization. During this event new sets of sinistral transfer NNE–SSW trending faults originated, that partly reactivated boundaries of the principal tectonic zones. Blocks delimited by second-order sinistral and first-order dextral faults, then rotated in a clockwise manner by ≈ 80°. The whole system subsequently suffered a period of NNE–SSW shortening that affected the Variscan belt namely along the former Laurussian and former Variscan sub-plate contact in the north and in the south, where the giant Cantabrian orocline developed at around 310–300 Ma due to hard collision with Gondwana. This deformation is associated with the clockwise rotation of Laurussia together with the accreted northern sector of the Variscan belt, and the anticlockwise of Gondwana. This clockwise 30° rotation is achieved by A1 remagnetizations, while the southern part of Iberia suffered anticlockwise rotation. The final stage of rapid clockwise rotation affecting the northern limb of the Iberian Arc including Corsica and Sardinia is attributed to giant N–S extension affecting the whole Variscan belt at the onset of Permo-Triassic opening of the Tethys ocean. This complex evolution is regarded as a result of the readjustment of inhomogeneous and thermally and mechanically instable mobile space in between reorganizing the Gondwana and Laurussia megaplates and the opening of the Palaeotethys ocean during the final stages of formation of the Pangea supercontinent. Finally, the palaeomagnetically constrained rotations and tectonic evolution of the Variscan belt are explained using a pinned model of “internal” and “external” rotations of blocks driven by activation of dextral shear zones by N–S compression and E–W transtension in particular.