A distinctive suite of lithologies occurs in the Lower Devonian Rocky Camp mound of eastern Victoria. Lime mudstones contain abundant stromatactis cavities, and wackestones contain shelter cavities beneath skeletal constituents, together with unsheltered stromatactis cavities. Irregularly distributed muddy masses occur in grain-supported lithologies, together with abundant shelter cavities and perched internal sediment. These lithologies are completely intergradational, and clast content is the principal variant controlling the fabric developed. It is proposed that the fabrics in this lithological suite resulted from a process of internal erosion and sedimentation (internal reworking) which occurred directly below the sediment-water interface. Each stromatactis cavity was subject to erosion of carbonate mud from the roof and redeposition of this material on the floor (either directly below the point of erosion or downstream from it). In this way, cavities migrated upwards leaving a trail of internal sediment beneath. In wackestones, the migrating cavities were trapped beneath skeletal constituents, forming diagenetic shelter cavities. The fabrics of grain-supported lithologies can be similarly explained. A precursor cavity system of organic or inorganic origin is required to initiate the process of internal erosion. There is no evidence relating to the origin of this cavity system in the Rocky Camp mound.