The tectonic setting of southwestern Yukon is characterized by the relative motions of the Pacific plate and Yakutat microplate with North America, leading to a spectrum of tectonic regimes along the margin. Studies of earthquake source characteristics provide a valuable constraint on fault behaviour, crustal stress, and regional plate tectonics. Yet, such work has historically been limited in Yukon due to sparse seismic network coverage. In this work, we take advantage of improvements in seismic station coverage over the last decade to estimate focal mechanisms for small and moderate-magnitude (M≥2.0) earthquakes from P-wave first-motion polarity data. We invert these data using a probabilistic method that rigorously quantifies focal mechanism uncertainties. Furthermore, we use updated earthquake hypocentre locations from a recently relocated regional catalogue that significantly improves event depth estimates. New focal mechanism solutions for several hundred events significantly improve the spatial coverage for southwestern Yukon and enable new tectonic interpretation. Our focal mechanism solutions support the existence of several unmapped faults throughout the region. Finally, we use probabilistic focal mechanism solutions as input for subsequent inversions for the orientation of crustal stress, with associated uncertainties. This work reveals the spatial variability of crustal stress in southwestern Yukon, including a transition in stress regimes from transpressional to pure compression. Together, this work provides a valuable contribution toward improving our understanding of regional tectonics throughout southwestern Yukon.