Sepiolite and palygorskite are common as layers and nodules in the Neogene lacustrine sediments of the Eskişehir area. This study aims to determine their mineralogical and geochemical characteristics, plus the distribution of these economically important sepiolite and palygorskite deposits within the lacustrine environment. Using these data the research goes on to discuss the environmental conditions for their formation. Sepiolite and palygorskite layers are associated with dolomite, marlstone, and argillaceous limestone. The sepiolite nodules (meerschaum), which are former magnesite gravels, are observed in the Upper Miocene reddish-brown fluvial deposits derived from the ophiolite and its fracture-infills at the northern margin of the basin. Sepiolite and palygorskite are only sparsely associated with dolomite and accessory magnesite, quartz, feldspar, and amphibole. Sepiolite and palygorskite fibers formed as oriented platy fan, interwoven, and knitted aggregates in the absence of dolomite indicated precipitation from supersaturated solution. Sepiolite and palygorskite fibers edging dolomite crystals postdate dolomite and formed through precipitation in a vadose environment under semi-arid to arid climatic conditions. High values of Mg+Fe+Ni and enrichment of light rare earth elements (LREE) relative to middle rare earth elements (MREE) and heavy rare earth elements (HREE), Sr content, depletion of Rb+Ba and K, and negligible negative Eu anomalies all reflect the derivation from the Paleozoic metamorphic and Upper Cretaceous ophiolitic rocks. Locally, Upper Miocene to Lower Pliocene volcanic, volcanoclastic, and fluvio-lacustrine sedimentary rocks supplied the required Si, Mg, Al, and Fe for precipitation of Al-sepiolite and Mg-palygorskite with average structural formulae of Si11.91Al0.09O30Mg6.60Al0.78Fe0.13 (OH)4Na0.12K0.06(OH2)4·nH2O and Si7.74Al0.26O20Mg2.52Al1.13Fe0.38(OH)2(OH2)4Na0.32K0.14Ca0.12·nH2O, respectively. In contrast to the layered sepiolites, the absence of Al and high Ni content in sepiolite nodules suggest formation through replacement of magnesite gravels at shallow burial in an alkaline environment. The calculated meerschaum sepiolite chemical formula is: Si12.02O30Mg7.87Fe0.01(OH)4Na0.13K0.03(OH2)4·nH2O.