We used emissivity spectra from the Thermal Emission Spectrometer (TES) to identify the signature of crystalline gray hematite in Capri Chasma. Geologic units associated with major concentrations of hematite were then mapped using HiRISE, CRISM, and CTX images from the Mars Reconnaissance Orbiter (MRO). Along the northern portion of the Interior Layered Deposit (ILD), a lower polyhydrated sulfate (PHS) unit lies beneath a thicker kieserite unit, above which is a thinner upper PHS. An exposure at the thickest central portion of the ILD reveals additional sulfates, including a middle PHS, a mixture of lower hydration states PHS, and an intercalated unit comprised of kieserite and szomolnokite. We interpret these compositional transitions to reflect either changes in aqueous chemistry (e.g., iron levels and salinity) during groundwater upwelling events or successively buried layers of dust, ice and volcanic aerosols laid down over obliquity cycles. In addition to these sulfates, we identified a few small mounds along the chasma floor composed of either mixtures of ferric hydroxysulfate and Fe/Mg-smectites, or possible opal, leached clays, and Fe/Mg-smectites. Gray hematite is strongly spatially correlated to kieserite-bearing slopes within the ILD and mantled PHS along the northern chasma floor. These results are consistent with sulfate and hematite formation found elsewhere on Mars, including Meridiani Planum, Aram Chaos, and several other chasmata and chaos regions within Valles Marineris.