We use densely spaced campaign GPS observations and laboratory friction experiments on fault rocks from one of the world’s most rapidly slipping low-angle normal faults, the Mai’iu fault in Papua New Guinea, to investigate the nature of interseismic deformation on active low-angle normal faults. GPS velocities reveal 8.3±1.2 mm/yr of horizontal extension across the Mai’iu fault, and are fit well by dislocation models with shallow fault locking (above 2 km depth), or by deeper locking (from ~5-16 km depth) together with shallower creep. Laboratory friction experiments show that gouges from the shallowest portion of the fault zone are predominantly weak and velocity-strengthening, while fault rocks deformed at greater depths are stronger and velocity-weakening. Evaluating the geodetic and friction results together with geophysical and microstructural evidence for mixed-mode seismic and aseismic slip at depth, we find that the Mai’iu fault is most likely strongly locked at depths of ~5-16 km and creeping updip and downdip of this region. Our results suggest that the Mai’iu fault and other active low-angle normal faults can slip in large (M > 7) earthquakes despite near-surface interseismic creep on frictionally stable clay-rich gouges.