Serpentinites, which contain high concentrations of Cr and Ni, weather easily into layer silicates and are therefore a possible source of metal contamination in soils. In the present study three soil profiles formed on serpentinites in a paddy field in eastern Taiwan were investigated to understand pedogenic clay-mineral transformations and to determine the relationship between the mineralogical characteristics and labile Cr and Ni in the soil. To this end, physicochemical analyses, micromorphology, X-ray diffraction, and Fourier transform infrared spectroscopy were employed. Serpentine and chlorite were the dominant minerals in the soil parent material, with smaller amounts of pyroxene, amphibole, and talc. Progressive weathering and the release of cations from the parent material resulted in the pedogenic formation of smectite, vermiculite, and interstratified chlorite-vermiculite, demonstrated by their presence in all Ap and AC horizons but their absence from the C horizons. Serpentine, pyroxene, amphibole, and talc are proposed to be transformed to low-charge smectite, while chlorite transformed to vermiculite through an interstratified chlorite-vermiculite phase. The surface soils were enriched in oxalate-extractable Fe relative to the subsoils, which was probably generated by the artificial flooding and draining of the paddy soils. The artificial flooding, which typically releases Fe, may also drive the observed partial hydroxyl interlayering of smectite and incomplete interlayer OH sheets of chlorite. Labile Cr and Ni (extracted with 0.1 N HCl) ranging from 4.7 to 26.8 mg kg−1 and from 56 to 365 mg kg−1, respectively, increased significantly toward the surface soil, consistent with weathering. The heavy metals released may pose a threat to the environment as well as to human health by entering the food chain.