A chaotic mudstone unit within the lower Blomidon Formation (Late Triassic) has been traced for 35 km in the Mesozoic Fundy rift basin of Nova Scotia. This unit is characterized by highly disrupted bedding that is commonly cut by small (<0.5 m) domino-style synsedimentary normal faults, downward movement of material, geopetal structures, variable thickness, and an irregular, partially faulted contact with the overlying unit. The chaotic unit is locally overlain by a fluvial sandstone, which is overlain conformably by mudstone. Although the thickness of the sandstone is highly variable, the overlying mudstone unit exhibits only gentle regional dip. The sandstone unit exhibits numerous soft-sediment deformation features, including dewatering structures, convoluted bedding, kink bands, and convergent fault fans. The frequency and intensity of these features increase dramatically above low points at the base of the sandstone unit. These stratigraphic relations suggest buried interstratal karst, the subsurface dissolution of evaporites bounded by insoluble sediments. We infer that the chaotic unit was formed by subsidence and collapse resulting from the dissolution of an evaporite bed or evaporite-rich unit by groundwater, producing dewatering and synsedimentary deformation structures in the overlying sandstone unit, which infilled surface depressions resulting from collapse. In coeval Moroccan rift basins, facies similar to the Blomidon Formation are associated with halite and gypsum beds. The regional extent of the chaotic unit indicates a marked period of desiccation of a playa lake of the appropriate water chemistry. The sedimentary features described here may be useful for inferring the former existence of evaporites or evaporite-rich units in predominantly clastic terrestrial environments.