It is generally assumed that the seawater-derived fluids that feed black smoker vent fields on the seafloor are discharged vertically from depths of ∼1–3 km. We present new oxygen and strontium isotope data that show that fluids at black smoker temperatures of 300–400 °C were focused along a low-angle detachment fault at 15°45′N near the Mid-Atlantic Ridge. Isotopic alteration is the most extreme ever reported from oceanic rocks altered at similar temperatures, indicating intensely focused fluid flow both in recharge and discharge parts of the hydrothermal system. Rare earth element mobility in the fault rocks demonstrates isotopic alteration by evolved hydrothermal fluids, not conductively heated seawater. The fault zone protolith was predominantly ultramafic, but also included mafic rocks, with metasomatic alteration to talc-tremolite-chlorite schists resulting mainly from chemical exchange between these lithologies during fluid flow. Fluids in equilibrium with this assemblage would be similar to ultramafic-hosted black smoker fluids. We present a new model in which hydrothermal circulation around detachment faults evolves from basalt hosted (TAG type), to footwall ultramafic hosted (Rainbow type), to low-temperature ultramafic hosted (Lost City type). Key features of our model are the intrusion of gabbro bodies immediately below the detachment to provide a heat source for circulation, and focusing of fluid flow into the detachment fault to allow venting away from the neovolcanic axis.