Trachyandesite rocks, occurring over an area of about 1 km2 in the southwest part of Limnos Island, Greece, are altered mainly to halloysite. The samples were collected and analysed by polarizing microscopy, powder X-ray diffraction (XRD), scanning electron microscopy (SEM) and chemical analysis. The alteration of plagioclase to halloysite follows seven discrete stages that are described in detail. The geochemical evaluation of the data shows enrichment of the light REE (LREE) over heavy REE (HREE) as expressed by the (La/Yb)n ratio. The σLREE range from 206.44 to 272.30, while the sum of HREE varies from 11.01 to 26.26. The (La/Yb)n ratio ranges from 9.72 to 27.64. Fractionation among LREE expressed as (La/Sm)n and between middle REE (MREE) and HREE is shown as (Tb/Yb)n ratios. The most altered rocks close to the fault zone have high (Tb/Yb)n ratios and low (La/Sm)n and Eu/Eu* ratios. Although mineralogy and clay mineral textures indicate hydrothermal genesis of halloysite, the geochemical data are not conclusive due to a secondary weathering effect.