The Karacayir kaolinite deposit, situated in the Usak-Gure basin of western Turkey, is hosted by rhyolite and andesite of the Miocene Dikendere volcanics, and by muscovite schist, glaucophane schist, talc schist and chlorite schist of the Palaeozoic Esme Formation. The association of kaolinization with silicification and Fe-oxidation, and the presence of pyrite, chalcopyrite and gypsum, suggest that hydrothermal alteration processes in the volcanics and schists were controlled by faults. Thus, prevalent kaolinite is associated with quartz, smectite, illite and opal-CT in the centre of the deposit, with relative increases in smectite, illite, chlorite and Fe (oxyhydr) oxide phases outwards and upwards. Texturally, sanidine and plagioclase crystals are sericitized and kaolinized in rhyolite and andesite respectively, whereas muscovite, chlorite and feldspar in schists exhibit partial kaolinization and illitization. Micromorphologically, authigenic kaolinite, having hexagonal book-like and vermiform textures, occurs as rims on feldspar, muscovite and chlorite suggesting a dissolution-precipitation mechanism. Pyrite, locally transformed to hematite, is euhedral to subhedral, with grain sizes of +/- 400 mu m. Iron occurs as Fe2+ and Fe3+ within the structures of the Karacayir kaolinites and smectites, as determined by Mossbauer spectroscopy. Enrichment of Mg, Ca and Fe in the kaolinite deposit is related to the presence of smectite, calcite, dolomite, pyrite +/- chalcopyrite, goethite and hematite. Kaolinized volcanic and schist samples from the Karacayir area are characterized by 35.77-87.58% SiO2, 3.27-22.83% Al2O3, 0.91-9.16% Fe2O3, 0.01-5.94% K2O and 0.26-12.41% MgO, revealing moderate degrees of kaolinization +/- illitization +/- smectitization coexistent with high degrees of silicification and Fe (oxyhydr) oxidation. Increases of Fe2O3, MgO, CaO and Zr and decreases of Rb, Sr, and Ba (except for decreases in partially altered volcanics) in kaolinite samples adjacent to schists and volcanic rocks suggest that kaolinite developed by alteration of both schists and volcanics. The Karacayir kaolinite and smectite have delta O-18 and delta D values ranging from 11.6 to 20.4 parts per thousand, and -79 parts per thousand to -112 parts per thousand, respectively. Using the isotopic fractionation factor (alpha), the temperatures of formation for the Karacayir kaolinite and smectite were determined to be 61.6-131.7 degrees C and 61.2-148.9 degrees C, respectively, and negative delta S-34 values for pyrite, chalcopyrite and gypsum reflect formation under the influence of hydrothermal activity; this assumption is supported by isotope equilibrium temperatures of 80-125 degrees C calculated from pyrite-chalcopyrite pairs. Thus, the Karacayir kaolinite deposit formed by an increase in Al +/- Fe/Si under acidic environmental conditions, which facilitated epithermal alteration of feldspar and volcanic glass in volcanic rocks, and muscovite, chlorite and feldspar in schists, controlled by tectonic activity during Miocene volcanism.