Öz Palygorskite is a dominant clay mineral in most soils and sediments in central Iran. Few studies investigated the formation of palygorskite under the influence of groundwater in central Iran. This study aims to identify the effects of groundwater on the formation of palygorskite and associated clay minerals. Four soil profiles along a calcareous catena with different depths of groundwater were sampled and analyzed using X-ray diffraction (XRD), transmission electron microscopy (TEM), scanning electron microscopy (SEM) and inductively coupled plasma mass spectroscopy (ICP-MS). Chemical composition of groundwater and that of soil samples were also determined. The XRD results showed the presence of palygorskite, smectite, mica, chlorite, quartz and feldspars in soils studied. The highest amount of palygorskite was found in horizons with permanent occurrence of groundwater. Palygorskite was not detectable using XRD in surface horizons. However, TEM studies confirmed presence of palygorskite in surface horizons. Smectite showed an inverse trend when compared with palygorskite. Stability diagrams for smectite-palygorskite system in studied profiles showed that geochemical conditions were conducive for the formation of palygorskite from smectite. Growth of palygorskite fibers on gypsum and calcite crystals, as revealed by SEM observations, clearly indicates the in situ formation of palygorskite. Chemical composition of groundwater in study area showed high concentrations of soluble Mg2+ and silica which are necessary for the formation of palygorskite from solution. In conclusion, it seems that the two likely sources of palygorskite in the study area include the transformation from smectite and precipitation from solution.