Surface weathering on the Sonoran desert produces iron-bearing clay minerals which are concentrated in fine-grained sediments eroded from the desert. The clay fraction of the desert soils and desert-derived alluvium contains an average of about 4.5 percent total iron. An average of less than 1.0 percent iron occurs in oxide coatings on grains; the remainder is held in the clay-mineral lattices. It is inferred that under favorable interstitial chemical conditions the iron oxide coatings age to hematite and the clay undergoes postdepositional alteration, yielding additional iron which ultimately forms additional hematite pigment. Biotite, another important source of iron, commonly is associated with the clay and undergoes similar intrastratal alteration. It is concluded that the characteristic concentration of iron and hematite pigment in mudstones and shales in many ancient red beds, particularly in red beds that are associated with evaporites or aeolian sandstones, or both, reflects initial concentration of iron-bearing clay minerals and biotite in fine-grained sediments derived from desert source areas.