The mineralogical characteristics of halloysite in rectorite pelite in the Zhongxiang area, Hubei, China, were investigated using X-ray diffraction, scanning electron microscopy and high-resolution transmission electron microscopy methods. The results show that halloysite crystals exhibit euhedral lamellar, tubular or club-like, and needle-like or fibre-like morphologies, indicating that they crystallized from a significantly water-saturated environment. The mineral assemblage of the rectorite pelite is rectorite, halloysite, illite, gypsum, pyrite and rutile, suggesting a weak supergene alteration. Several features related to crystallization of halloysite were noted. Growth of halloysite on rectorite edge surfaces in voids and twins of halloysite on a nanometer scale with composition plane (110) were found in the Zhongxiang rectorite pelite, and, in particular, the tapered ends of tubes suggest that halloysite crystallized from solution. Disaggregation of lamellar halloysite particles into parallel clusters of single tubular halloysite crystals suggests that because of significant [H2O] activity in the environment, halloysite may have been derived from the alteration of rectorite.