A closed depression in the Noctis Labyrinthus region of Mars (at 10.4°S, 98.6°W), believed to have formed in the Late Hesperian, holds an inner pit partially filled with several hundred meters of stratified material. Compact Reconnaissance Imaging Spectrometer for Mars (CRISM) visible-near infrared reflectance data reveal signatures of numerous hydrated minerals including halloysite/kaolinite, Fe-smectite, Si-OH bearing phases and Fe-sulfates (polyhydrated, monohydrated, and hydroxylated types, including jarosite). We use CRISM data, high resolution imagery (HiRISE) and HRSC (High Resolution Stereo Camera) derived elevation to analyze the morphology, composition and stratigraphy of these materials. We propose an alteration sequence including formation of acid sulfate solutions from groundwater and magmatic sulfur, which then locally altered the basaltic bedrock and layered sediments mainly deposited from volcanic tephra, forming Fe-smectite and Fe-sulfates. The mineral variability can mostly be explained by local variations in the pH of the altering fluids, with original acidity being buffered by dissolution of primary minerals; and by variable fluid input and evaporation and/or freezing rates (resulting in various water/rock ratios). This site shows local formation of almost all classes of minerals identified thus far on Mars without invoking global conditions. Processes related to local volcanic activity and associated hydrothermalism were able to produce, during an era in which the climate is believed to have been cold, a large variety of hydrated minerals. This study highlights the importance of the geological setting of hydrated minerals in the understanding of Mars geologic and climatic evolution.