Microbialites (benthic microbial carbonate deposits) were discovered in a hypersaline alkaline lake on Eleuthera Island (Bahamas). From the edge towards the centre of the lake, four main zones of precipitation could be distinguished: (1) millimetre-sized clumps of Mg-calcite on a thin microbial mat; (2) thicker and continuous carbonate crusts with columnar morphologies; (3) isolated patches of carbonate crust separated by a dark non-calcified gelatinous mat; and (4) a dark microbial mat without precipitation. In thin section, the precipitate displayed a micropeloidal structure characterized by micritic micropeloids (strong autofluorescence) surrounded by microspar and spar cement (no fluorescence). Observations using scanning electron microscopy (SEM) equipped with a cryotransfer system indicate that micrite nucleation is initiated within a polymer biofilm that embeds microbial communities. These extracellular polymeric substances (EPS) are progressively replaced with high-Mg calcite. Discontinuous EPS calcification generates a micropeloidal structure of the micrite, possibly resulting from the presence of clusters of coccoid or remnants of filamentous bacteria. At high magnification, the microstructure of the initial precipitate consists of 200–500 nm spheres. No precipitation is observed in or on the sheaths of cyanobacteria, and only a negligible amount of precipitation is directly associated with the well-organized and active filamentous cyanobacteria (in deeper layers of the mat), indicating that carbonate precipitation is not associated with CO2 uptake during photosynthesis. Instead, the precipitation occurs at the uppermost layer of the mat, which is composed of EPS, empty filamentous bacteria and coccoids (Gloeocapsa spp.). Two-dimensional mapping of sulphate reduction shows high activity in close association with the carbonate precipitate at the top of the microbial mat. In combination, these findings suggest that net precipitation of calcium carbonate results from a temporal and spatial decoupling of the various microbial metabolic processes responsible for CaCO3 precipitation and dissolution. Theoretically, partial degradation of EPS by aerobic heterotrophs or UV fuels sulphate-reducing activity, which increases alkalinity in microdomains, inducing CaCO3 precipitation. This degradation could also be responsible for EPS decarboxylation, which eliminates Ca2+-binding capacity of the EPS and releases Ca2+ ions that were originally bound by carboxyl groups. At the end of these processes, the EPS biofilm is calcified and exhibits a micritic micropeloidal structure. The EPS-free precipitate subsequently serves as a substrate for physico-chemical precipitation of spar cement from the alkaline water of the lake. The micropeloidal structure has an intimate mixture of micrite and microspar comparable to microstructures of some fossil microbialites.