An exceptional new occurrence of the mineral tamarugite, NaAl(SO4)2 · 6H2O, from a short karst cavity (Diana Cave, Băile Herculane; SW Romania) is described. It was formed by corrosion of the bedrock (limestone and marls) by a SO42−-rich steam condensate resulting from oxidized S2− ions escaping from the thermo-mineral water emerging from depth in the cave. Tamarugite forms dull white earthy aggregates. Scanning-electron microscope (SEM) observations reveal tabular subhedral crystals never exceeding 15 μm across. The cell parameters refined from the powder data for the monoclinic space group P21/a are: a = 7.358(6), b = 25.23(2), c = 6.093(5) Å, β = 95.16(5) °, V = 1126.98(1) Å3. The δ34S values of the cave sulphates and the thermal water confirm marine evaporites as the source of sulphur. The sulphate-acid alteration of limestone with contribution of Al3+ and Na+ from the marls and the thermal water is responsible for the formation of tamarugite. The steam-condensate alteration paragenesis includes native sulphur, bassanite, anhydrite, epsomite, pickeringite, halotrichite, apjohnite and alunite, as well as quartz and halite, all primary and secondary speleogenetic by-products.