Lower and middle Eocene ironstone sequences of the Naqb and Qazzun formations from the north-east Bahariya Depression, Western Desert, Egypt, represent a proxy for early Palaeogene climate and sea-level changes. These sequences represent the only Palaeogene economic ooidal ironstone record of the Southern Tethys. These ironstone sequences rest unconformably on three structurally controlled Cenomanian palaeohighs (for example, the Gedida, Harra and Ghorabi mines) and formed on the inner ramp of a carbonate platform. These palaeohighs were exposed and subjected to subaerial lateritic weathering from the Cenomanian to early Eocene. The lower and middle Eocene ironstone sequences consist of quiet water ironstone facies overlain by higher energy ironstone facies. The distribution of low-energy ironstone facies is controlled by depositional relief. These deposits consist of lagoonal, burrow-mottled mud-ironstone and laterally equivalent tidal flat, stromatolitic ironstones. The agitated water ironstone facies consist of shallow subtidal–intertidal nummulitic–ooidal–oncoidal and back-barrier storm-generated fossiliferous ironstones. The formation of these marginal marine sequences was associated with major marine transgressive–regressive megacycles that separated by subaerial exposure and lateritic weathering. The formation of lateritic palaeosols with their characteristic dissolution and reprecipitation features, such as colloform texture and alveolar voids, implies periods of humid and warm climate followed major marine regressions. The formation of the lower to middle Eocene ironstone succession and the associated lateritic palaeosols can be linked to the early Palaeogene global warming and eustatic sea-level changes. The reworking of the middle Eocene palaeosol and the deposition of the upper Eocene phosphate-rich glauconitic sandstones of the overlying Hamra Formation may record the initial stages of the palaeoclimatic transition from greenhouse to icehouse conditions.