Shear‐wave splitting parameters of fast polarization direction (Φ) and delay time (δt) are determined using data from the Southern Alps Passive Seismic Experiment (SAPSE), on the South Island of New Zealand and in the surrounding region. Our results clearly show that Φ are subparallel to trends of the Alpine and Marlborough Faults, and to the Pacific‐Australian plate boundary. The δt values range from 0.6–2.2 s with an average value of 1.6 s; the largest values are from the central South Island. The main source of the observed shear‐wave splitting is an anisotropic region between 40–400 km. The width of the zone is approximately 200 km. We attribute the coincidence of surface structural trends with the measured Φ, and the large δt values, to significant shear deformation in a 200 km thick zone along the plate boundary extending from the surface to deep within the upper mantle.