The form of microbialite accumulations is largely the product of environmental processes and microbial activity. Recent work has largely concentrated on the identification and classification of microbialites with little attention being paid to their environmental significance. This study describes the environmental distribution of the varied stromatolite forms recorded from the Middle Old Red Sandstone sequences of the Orcadian Basin. Comparisons are made with Triassic examples from East Greenland and modern microbialite accumulations. The Middle Old Red Sandstone of Northern Scotland was deposited in a predominantly lacustrine setting. Stromatolites are recorded from both steep basin margin coincident settings and lower gradient settings where the lake margin was distant from the basin margin. In the latter case stromatolite development is largely restricted to transgressive lacustrine sequences, during the deposition of which reduced rates of sedimentation resulted from the migration of sediment input points towards the basin margin. Stromatolite sheets, domal mounds, aligned mounds (and associated runnels), sand-cored stromatolite mounds and reefal stromatolite accumulations have been identified representing the transition from more sheltered to more exposed environments. In basin margin coincident settings stromatolite accumulation is restricted to areas of low sedimentation where microbialites coat boulders and pebbles. A model for the palaeoenvironmental distribution of the stromatolite forms described is proposed and is shown to be applicable to similar examples from the Triassic of East Greenland. It is suggested that this model may be more widely applicable to stromatolitic accumulations in similar lacustrine settings through large portions of the Phanerozoic.