A strong, shallow earthquake occurred near Heraklion (Crete, Greece) on 27 September 2021. The earthquake produced significant ground deformation in the vicinity of Arkalochori village but without any evidence for surface ruptures of primary origin. We used geodetic (InSAR and GNSS) data to map motions of the Earth’s surface that occurred during and shortly after the earthquake. A 14 cm subsidence of the GNSS station ARKL and a maximum of 19 cm distance from the SAR satellite were recorded. The measured surface displacements were used to constrain the rupture geometry and slip distribution at depth. Our best-fitting inversion model suggests that the rupture occurred on a 13 km-long planar normal fault striking N195° E dipping 55° to the northwest, with major slip occurring to the east and updip of the hypocentre. The fault tip is located 1.2 km beneath the surface. The maximum coseismic slip occurred in the uppermost crust, in the depth interval of 4–6 km. A decrease in the fault offsets toward the Earth’s surface is likely caused by an increased frictional resistance of the shallow layers to rapid coseismic slip. Satellite observations made in the first month after the earthquake detected no post-seismic deformation (i.e., below one fringe or 2.8 cm). The seismic fault may be identified with the Avli (Lagouta) segment of the NNE-SSW striking, west-dipping, 23 km-long neotectonic Kastelli Fault Zone (KFZ). Part of the rupture occurred along the Kastelli segment, indicating a fault segment linkage and a history of overlapping ruptures along KFZ. Based on geological data and footwall topography we estimate an average slip rate between 0.17–0.26 mm/yr for the KFZ. The Arkalochori earthquake is a paradigm example for the on-going extension of Heraklion basin (central Crete) in the WNW-ESE direction, which is almost orthogonal to the E-W Messara graben and other active faults along the south coast of Crete.