The Upper Miocene - Lower Pliocene clayey sedimentary units of the Cameli formation in the Sapaca area (Denizli Province, Turkey) were deposited in an areally limited, shallow-lacustrine environment and consist of mainly grey-green clays with intercalations of scarce detrital material, clayey dolomite and dolomite. The clayey units are dominated by palygorskite, associated mainly with smectite and abundant dolomite, with accessory chlorite, illite, quartz, amphibole, feldspar and amorphous material. The distribution of palygorskite and smectite varies with lithological changes. Smectite- and chlorite-bearing intervals were largely due to partial increase in detrital-sediment input throughout the sequence especially in the lower and upper levels, whereas palygorskite predominates in the middle level of the sequence throughout the basin in association with scarce dolomitic material. Development of sedimentary structures, such as dessication cracks, root imprints, and sinusoidal ripple marks, was widespread in the Sapaca lake particularly during some late carbonate precipitation and periods of emergence. Observations via scanning and transmission electron microscopy indicate that short palygorskite fibres and fan-shaped fibre bundles grew from partiallly eroded smectite and on dolomite grains. Based on field evidence and mineralogical determinations, the palygorskite is presumed to have formed authigenically either by conversion from detrital smectite or by direct precipitation in a dolomite-mixing environment. The Si, Mg, Al + Fe and Ca required for palygorskite formation and dolomitization were supplied in solution(s) from the basement units, namely, ultrabasic rocks, ophiolitic melange and ophiolite gravel-bearing conglomerate, smectitic clays and dolomitic carbonates.