We present a modern seismological reassessment of the Chios earthquake of 23 July 1949, one of the largest in the Central Aegean Sea. We relocate the event to the basin separating Chios and Lesvos, and confirm a normal faulting mechanism generally comparable to that of the recent Lesvos earthquake located at the Northern end of that basin. The seismic moment obtained from mantle surface waves, M-0=7x10(26) dyn cm, makes it second only to the 1956 Amorgos earthquake. We compile all available macroseismic data, and infer a preference for a rupture along the NNW-dipping plane. A field survey carried out in 2015 collected memories of the 1949 earthquake and of its small tsunami from surviving witnesses, both on Chios Island and nearby Oinousses, and on the Turkish mainland. While our results cannot help discriminate between the two possible fault planes of the 1949 earthquake, an important result is that both models provide an acceptable fit to the reported amplitudes, without the need to invoke ancillary sources such as underwater landslides, in contrast to the case of other historical tsunamis in the Aegean Sea, such as the 1956 Amorgos and 1948 Rhodos events.