Investigation by transmission electron microscopy (TEM) of palygorskite-rich units from the Hawthorne Formation, southern Georgia shows textures indicative of sedimentary and diagenetic processes. Palygorskite is the dominant mineral with lesser amounts of illite, kaolinite, smectite, and illite-smectite interstratified phases. Palygorskite fibers exhibit two textures: (1) the most dominant is a “bird’s nest” texture of three-dimensional arrays of interwoven fibers, which must have formed in an unconfined space, and (2) clusters of parallel fibers that occur in the pore space of the bird’s nest texture, which probably formed after the development of the bird’s nest texture. Both smectite and illite-smectite (Reichweite, R=0) minerals are present as detrital crystallites. However, these minerals more commonly occur as fine-grained authigenic particles. Compositions of the authigenic smectite and palygorskite are similar. Smectite also occurs epitaxially over discrete detrital particles of illite and kaolinite, and composite grains are commonly <0.05 µm in diameter. These composite grains are larger than surrounding smectite or palygorskite fibers. Therefore, textures of these composite grains suggest smectite precipitation and overgrowth in the water column. Illite and kaolinite particles free from smectite overgrowth occur and are commonly >2 µm in diameter. Phosphate occurs solely as hydroxyapatite and is probably derived from dissolution and reprecipitation of fecal pellets. Oxides are complex with detrital and authigenic populations present. Ti oxides, Fe-Ti oxides, cassiterite, and Cr and Mn bearing Fe-Ti oxides are common. The texture of palygorskite fibers indicate that the sediment-water interface was hydraulically stable and very little if any bed load transport of sediment occurred. Because palygorskite is known to precipitate in saline conditions, the occurrence of composite grains of smectite overgrown on illite and kaolinite, with the presence of palygorskite may reflect a stratified water column in the Appalachicola embayment during Hawthorne time. This water column may have consisted of a lense of fresh water that originated from drainage in the northeast which overrode a denser, more saline layer of water, probably derived from the Gulf of Mexico.