Abstract Extraordinary sequences of conspicuous, pervasive and laterally persistent varves characterize the Castile evaporites. They occur as singlets (calcite laminae), couplets (calcite laminae interstratified with anhydrite laminae), thick couplets (calcite laminae interstratified with thin anhydrite beds) and triplets (calcite and anhydrite laminae interstratified with thin halite beds). The varves accumulated in a deep (initially ≈ 550 m), persistently stratified, saline lake surrounded by an extinct reef. The lake had formed when the reef grew across a channel between an embayment and the ocean. Although located virtually on the palaeo-equator, the lake experienced negligible meteoric influx and extreme seasonality. During the season of high relative humidity, more marine groundwater entered the lake through the permeable reef barrier than exited as reflux and, secondarily, as evaporation. Consequently, the lake level rose by up to several metres to sea level. The ‘refreshening’ decreased salinity and replenished dissolved CO2– the critical nutrient limiting growth of indigenous phytoplankton. Algae proliferated, pH increased and CaCO3 precipitated. It mixed with organic matter to form a thin, dark lamina. During the season of low relative humidity, tens of cubic kilometres of water evaporated from and, secondarily, leaked out through the surrounding reef. More water exited than entered, brine level fell below sea level, and salinity of the upper brine layer increased. Gypsum usually precipitated and rained onto the basin floor forming a couplet; infrequently, halite also precipitated forming a triplet. Every few thousand years, for <50 to several hundred years, the lake became unstratified during the dry season, and wind-induced overturn allowed a layer of gypsum crystals up to ≈ 2 cm high to precipitate on the basin floor. Each layer, now thin beds of anhydrite nodules and anhydrite pseudomorphs after gypsum, and an underlying lamina of CaCO3 and admixed organic matter formed a thick couplet. The different varve types recur with a period of 1800–3000 years reflecting climatic changes on a millennial time scale.