The devastating tsunami after the 2018 Indonesian Sulawesi-Palu strike-slip earthquake was a surprise because strike-slip faulting was a known phenomenon of primarily lateral movement of land, while tsunamis were believed to be caused by vertical movements of seafloor or landslides. Here we demonstrated how the strike-slip faulting could have pushed waters from outside and inside the Palu Bay to form a powerful tsunami in the Palu Bay. We constructed three earthquake inversions from seismographs, satellite radar and optical imagery, and used an open-source ocean circulation model to replicate the tsunami. Our experiments revealed that: (1) the southward horizontal displacement of deeper-water slopes along the Makassar coast generated a long-wave tsunami of 40 km, propagating southward into the Palu Bay and consisting with the two distinguished tsunami-peaks in the Pantoloan tide-record, twice higher than the local resonance waves; (2) the two types of tsunamis in the Mamuju tide-record—the “early arrival” tsunami and the late larger tsunami—were originated from the outside and inside sources; and (3) the eyewitness account of the whirlpool circulation in the Palu Bay could be explained by the horizontal strike-slip forcing of the two involved tectonic plates. The east plate was largely responsible for pushing the long-wave tsunami southward that inundated the Palu City and resulted in the devastation. Our findings suggest that the tsunami’s behavior of strike-slip earthquakes is more complex than previously thought and should be considered in future tsunami early warnings.