<p>The Yangyuan Basin (YYB) is a fault basin located in the northern part of the Shanxi Graben System. Despite its relatively few historical earthquakes, the basin has exhibited active neotectonic deformation since the Cenozoic. This study utilizes Sentinel-1A/B SAR data from two tracks spanning 2017–2021, combined with GNSS velocity fields, to investigate the present-day crustal deformation characteristics, main faults activity parameters, and seismic hazards of the YYB through PS-InSAR technology and dislocation model. The results indicate that: (1) The dip-slip rates of the northern margin fault of the YYB gradually decrease from west to east, which may be attributed to the significantly higher uplift rate of the western segment of the Xiong’er Mountain fault block compared to its central and eastern segments under the regional tectonic stress field; in contrast, the dip-slip rates of individual segments of the north Liuleng Mountain fault are comparable. (2) The central and western segments of the northern margin fault of the YYB, as well as the Huajialing–Xiejiayao (HJL-XJY) segment and Huoshiling-Quchangcheng (HSL-QCC) segment of the north Liuleng Mountain fault, possess the potential to accumulate strain energy for moderate earthquakes. The estimated maximum moment magnitudes are approximately Ms 5.6–6.2 and Ms 5.8–6.0, respectively. (3) The YYB exhibits overall extensional tectonic characteristics; both the northern margin fault of the YYB and the north Liuleng Mountain fault exhibit dextral strike-slip movement. (4) The deformation of the YYB represents a superposition of tectonic and non-tectonic processes: under the regional tectonic stress field, the Xiong’er Mountain and Liuleng Mountain fault blocks undergo uplift, while the basin interior exhibits subsidence driven by the combined effects of tectonic loading and groundwater extraction.</p>