Arrested-type charnockite formation occurs in an assemblage of high-grade gneisses at several localities of the Chilka Lake area that belongs to the Proterozoic Eastern Ghats Belt of India. The isolated ellipsoidal domains are found exclusively in leucogranite (leptynite) bands that intruded lit-par-lit interbanded granulite-grade supracrustal and intermediate igneous rocks (khondalite–enderbite). Macrostructures and microfabrics document a multiple deformation of the rock assemblage under high-grade conditions. The intrusion of the leucogranitic melts separates a first episode of deformation, D1, from a younger progressive deformation, D2–D4. A transpressive regime and inhomogeneous deformation is indicated for D2–D4 by the associated structures and fabrics. But quartz c-axis patterns show that pure shear prevailed during the closing stages of deformation. The spatial distribution and orientation of the ellipsoidal charnockite domains within the host leptynite and the orientation pattern of orthopyroxene c-axes inside the domains provide evidence for a synkinematic in situ formation of the domains during D3, through partial breakdown of the leptynite assemblage (Bt + Grt + Qtz + Fl1 ⇌ Opx + Fsp + Ilm + Fl2/L). Local fluid migration along steep foliation planes associated with large-scale D3 folds triggered the reaction. Orthopyroxene blastesis was confined to the centre of the domains, and an envelope formed in which the residing fluid caused secondary intergranular formation of chlorite, ore and carbonate, imparting the domains’ typical greenish-brown charnockite colour. The shape of the envelope, which varies from prolate in limbs to oblate in hinges of D3 folds, is responsive to the local stress field. Comparison of chemical rock compositions supports the in situ formation of charnockite in leptynite. Subtle compositional differences are controlled by the changing mineralogy. Compared to the host leptynite, the charnockite domains are enriched in K2O, Ba, Rb and Sr, but depleted in FeO*, MnO, Y and Zr. The data obtained in this study provide conclusive evidence that the ellipsoidal charnockite domains do not represent remnants of stretched enderbite layers as proposed by Bhattacharya, Sen & Acharyya, but formed in situ in the leptynite as a result of localized synkinematic fluid migration late in the deformation history.