Middle Jurassic strata atop the Wallowa terrane in northeastern Oregon link the Wallowa, Izee, and Olds Ferry terranes as related elements of a single long-lived and complex oceanic feature, the Blue Mountains island arc. Middle Jurassic strata in the Wallowa terrane include a dacitic ash-flow deposit and contain fossil corals and bivalves of North American affinity. Plant fossils in fluvial sandstones support a Jurassic age and indicate a seasonal temperate climate. Corals in a transgressive sequence gradationally overlying the fluvial units are of Bajocian age and are closely related to endemic varieties of the Western Interior embayment. They are unlike Middle Jurassic corals in other Cordilleran terranes; their presence suggests that the Blue Mountains island arc first approached the North American craton at high paleolatitudes in Middle Jurassic time. We consider the Bajocian marine strata and underlying fluvial volcaniclastic units to be a basin-margin equivalent of the Izee terrane, a largely Middle Jurassic (Bajocian) succession of basinal volcaniclastic and volcanic rocks known to overlie the Olds Ferry and Baker terranes.