The Key Lake unconformity-type uranium deposit occurs in a shear zone where it intersects the unconformity between Archean and Aphebian gneisses and the overlying Proterozoic Athabasca Group sandstones. The roots of the Key Lake and many other unconformity-type uranium deposits in the Athabasca basin are close to gneisses rich in graphite and most deposits have small amounts of carbonaceous materials (bitumen and hydrocarbon buttons) within and around altered basement and sandstone ore zones. In many Athabasca uranium deposits, hydrothermal fluids have destroyed graphite disseminated in the strongly altered gneisses in the vicinity of the deposits, prompting some to suggest that graphite was converted to CH4, which reduced and precipitated the uranium and partially condensed to form bitumen. The δ13C values of graphite collected from unaltered and altered gneisses around the Key Lake deposit have a limited range (−25 ± 5) and are not a function of distance from the mineralization or the intensity of alteration or deformation. The uniformity of these δ13C values suggests that the destruction of graphite was due predominantly to oxidation by basinal fluids from the sandstone and that the graphite near the deposits did not react to form substantial amounts of 12C-rich phases such as CH4. Most of the bitumen samples, which have higher H/C ratios than the graphite, have δ13C values identical to those of the graphite (−25 ± 5). The similarity in the isotopic compositions of carbon in the bitumen and in the graphite indicates that the bitumen formed from degradation of graphite as a result of reactions with no significant isotopic fractionations, such as ones involving radiolysis of graphite. The hydrocarbon buttons and a few samples of bitumen have petrographic relations and 13C/12C ratios (δ13C values less than −30) that are indicative of reduction of graphite by H2 produced from water by radiolysis. Graphite in these deposits did not play a central role as a reducing agent for uranium, rather it represents a critical structural factor by providing shear zones along which fluid flow can be focussed.