Dispersed facies basal ice – massive (i.e. structureless) ice with dispersed debris aggregates – is present at the margins of many glaciers and, as a product of internal glacial processes, has the potential to provide important information about the mechanisms of glacier flow and the nature of the subglacial environment. The origin of dispersed facies is poorly understood, with several hypotheses having been advanced for its formation, and there is disagreement as to whether it is largely a sedimentary or a tectonic feature. We test these established hypotheses at the temperate glacier Svínafellsjökull, Iceland, and find that none fully account for dispersed facies characteristics at this location. Instead, dispersed facies physical, sedimentological and stable-isotope (δ18O, δD) characteristics favour a predominantly tectonic origin that we suggest comprises the regelation and strain-induced metamorphism of debris-rich basal ice that has been entrained into an englacial position by tectonic processes operating at the base of an icefall. Further thickening of the resultant dispersed facies may also occur tectonically as a result of ice flow against the reverse bed slope of a terminal overdeepening. Lack of efficient subglacial drainage in the region of the overdeepening may limit basal melting and thus favour basal ice preservation, including the preservation of dispersed facies. Despite the relatively low sediment content of dispersed facies ( ∼1.6% by volume), its thickness (up to 25 m) and ubiquity at Svínafellsjökull results in a significant contribution to annual sediment discharge (1635–3270 m3 a−1) that is ∼6.5 times that contributed by debris-rich stratified facies basal ice.