The 1755 Lisbon tsunami was felt all over the North Atlantic, being one of the first major events of this kind relatively well documented by historical sources. However, in spite of the extensive research work on the historical reports by a considerable number of authors, the epicentre location of this event is still uncertain and its focal mechanism is still not well understood, implying a great uncertainty in the tsunami generating mechanism. The generally assumed epicentre, inferred from isoseismal maps, is located slightly north of the Gorringe Bank (SW Iberia) and the rupture mechanism has been assumed in the past to be similar to the well studied 1969.02.28 event.While all previous studies have used a seismic-based approach, this paper uses all that is known about the tsunami parameters at the coast — presented in a companion paper — to define the location and geometry of the tsunami source. For that purpose some backward ray-tracing techniques were developed and their results were used to define the initial fields in a number of shallow water simulations of the water height at the coastal locations where the most reliable historical data are available. The source parameters also took into account the estimated seismic energy released.The results obtained here suggest that the 1755 tsunami probably originated on the continental shelf, implying an epicentre area located between the Gorringe Bank and the Iberian coast, in a geodynamic context quite different from the one implied in the 1969.02.28 event. The amplitude of the initial movement in the source region, required by the shallow water simulations to account for the reported magnitudes, suggests an elongated but shallow rupture area, extending along the shelf. It is suggested that this location of the rupture would have significant implications in the geology of the region.