Incised valleys in extensional lacustrine systems should be common and significant petroleum targets, yet documentation and analysis of these systems are limited and, hence, so are predictive models for their location. Geologic mapping of the Miocene-Pliocene Humboldt Formation in Knoll basin, northeastern Nevada, has revealed a significant incised-valley system formed along the lacustrine margins of an extensional basin. The valley formed during a relative lake-level fall and incised into lacustrine shoreface and offshore sandstone and subsequently was filled with fluvial and eolian sediment as lake level rose. The valley's location was tectonically influenced; it is situated in the hinge zone of a syncline near the tip of the range-bounding fault system. Folding of the syncline was broadly synchronous with incision and filling, and it appears to have localized the valley along the topographically low hinge zone. Furthermore, the large relative lake-level change that produced the valley is only recorded in strata in the syncline area, suggesting that the location and cause of incision was greatly influenced by tectonics. Thus, the location of similar incised valleys in other extensional basins may be predictable if comparable tectonic features and processes are recognized. Our study suggests that the best locations to develop and preserve incised valleys are near the tips of normal faults during periods of overall high tectonic subsidence. Specific areas along basin-bounding faults where tectonically influenced incised valleys are more likely to form include fault-propagation folds, synthetic relay ramps near transfer faults, and areas that have large changes in fault slip. Although lake volume changes caused predominantly by climate change can be an important factor in producing incised valleys, tectonically influenced incised valleys are likely to be larger, better preserved, and more petroleum prone compared to climate-controlled incised valleys.