A crustal section is exposed across the Ailao Shan Tectonic Belt (ALTB) that is suggested to be the accommodation zone of southeastward extrusion of the Sundaland block during the Indian-Eurasian collision. A highly sheared high-grade metamorphic unit (HMU) is separated from the low-grade metamorphic unit (LMU) by an ultramylonite belt, i.e., the previously defined ‘Ailao Shan fault’. Rocks in the three units possess identical structural and kinematic characteristics. The ultramylonites exhibit brittle-ductile deformation characteristics in localized middle crustal high strain zone. Geothermometry analyses reveal contrasting deformation P-T conditions across the ultramylonite belt, i.e., 610~834 ℃, 0.4~0.6 GPa in the HMU and ca. 400 ℃ in the LMU, consistent with microstructural observations and quartz C-axis fabric analysis. The HMU and LMU are kinematically linked while mechanically decoupled, implying shearing of the two units at different crustal levels in the same strain field. Progressive stratified middle to lower crustal flow was responsible for the concurring high- and low-temperature fabrics at different crustal levels. They were juxtaposed during crustal flow in response to extrusion of the Sundaland block at ca. 30~21 Ma. Exhumation of lower crustal rocks and incision of a thick pile of middle crustal masses were attributed to doming during lower crustal flow. The previously defined ‘Ailao Shan fault’ occurred as a tectonic discontinuity (TDC) that may have inherited preexisting basement/cover contact along the ALTB. Ubiquitous occurrence of TDCs in middle crust provides a potential explanation for the middle crustal low-velocity and high-conductivity zone beneath the SE Tibet Plateau.