The chemical and mineralogical changes that have taken place during intrastratal alteration of hornblende in Pliocene red beds of Baja California, Mexico, were determined by electron-probe microanalysis and X-ray diffraction studies. The hornblende has altered to iron-rich montmorillonite, and thin sections show that this clay ultimately forms hematite-stained matrix. The alteration involves loss of iron, alkalis, alkaline earths, and probably silica. The authigenic clay shows progressive decrease in iron content outward from the decomposing hornblende, indicating selective removal from the clay by intrastratal leaching. The authigenic clay is therefore an important source of iron for hematite pigment, particularly in the matrix of these red beds.