A variety of finely laminated, subfossil, aragonitic stromatolites and oncolites occur on a regressive marginal flat surrounding Marion Lake, South Australia. These algal forms overlie a substrate of coarse, highly porous, moldic aragonitic limestone which passes progressively towards the take centre through a zone of interstatified aragonite and gypsum and ultimately to pure crystalline gypsum. All of these facies overlie Holocene marine carbonate bank sediments which unconformably overlie at least one upper Pleistocene marine unit. Detailed petrographic and stratigraphic studies, combined with comparative studies of related nearby lakes containing a variety of living aragonitic cryptalgalaminates, provide a model for development of the Holocene sedimentary sequence. Marion Lake last became inundated by the sea around 6500 years ago during the Holocene transgression, when a protected marine environment was initiated. Lateral sediment accretion sealed marine passes into the resulting lagoon system soon after sealvel stabilized, and a variety of gypsum and gypsum-carbonate-algal facies evolved. Pure gypsum was deposited in waters 2–3 m deep in the central basin area concurrently with formation of seasonally alternating gypsum and aragonite layers towards basin margins. Blue-green filamentous algae thrived in the shallower marginal areas and at least partly controlled carbonate deposition, which must have occurred during seasonal outflow of carbonate-rich ground water from the calcareous dune aquifer over denser gypsum-saturated waters. These systems eventually migrated towards the centre of the lake to produce the relationships preserved today. The fresher waters also leached the gypsum from the marginal gypsum-carbonate facies. Collapse due to gypsum dissolution, along with aragonite crystallization, combined to form a lake-marginal mega-polygonal facies. Teepee structures formed around polygon margins, with optimum conditions for stromatolite development occurring on the teepee crests. The actual stromatolites which occur around Marion Lake are strongly indurated and involve a variety of morphologies, the most common of which are laterally linked hemispheroids. Stacked hemispheroids and oncolites are also relatively common, along with irregular forms, many of which encrust a variety of substrate irregularities. Vertical relief of the stromatolites varies from centimetres to tens of centimetres and all forms are characterized by extremely fine internal interlaminations of alternate light and dark grey laminae which typically occur several per millimetre. The microstructure comprises micritic aragonite crystals with fibrous habit associated with organic matter, and occasional zones of abundant algal filament molds which are generally oriented normal to the laminae.