Lake Hoare in the Dry Valleys of Antarctica is covered with a perennial ice cover more than 3 m thick, yet there is a complex record of sedimentation and of growth of microbial mats on the lake bottom. Rough topography on the ice covering the lake surface traps sand that is transported by the wind. In late summer, vertical conduits form by melting and fracturing, making the ice permeable to both liquid water and gases. Cross-sections of the ice cover show that sand is able to penetrate into and apparently through it by descending through these conduits. This is the primary sedimentation mechanism in the lake. Sediment traps retrieved from the lake bottom indicate that rates of deposition can vary by large amounts over lateral scales as small as 1 m. This conclusion is supported by cores taken in a 3 × 3 grid with a spacing of 1.5 m. Despite the close spacing of the cores, the poor stratigraphic correlation that is observed indicates substantial lateral variability in sedimentation rate. Apparently, sand descends into the lake from discrete, highly localized sources in the ice that may in some cases deposit a large amount of sand into the lake in a very short time. In some locations on the lake bottom, distinctive sand mounds have been formed by this process. They are primary sedimentary structures and appear unique to the perennially ice-covered lacustrine environment. In some locations they are tens of centimetres high and gently rounded with stable slopes; in others they reach ∼ 1 m in height and have a conical shape with slopes at angle of repose. A simple formation model suggests that these differences can be explained by local variations in water depth and sedimentation rate. Rapid colonization and stabilization of fresh sand surfaces by microbial mats composed of cyanobacteria, eukaryotic algae, and heterotrophic bacteria produces a complex intercalation of organic and sandy layers that are a distinctive form of modern stromatolites.