The geologic relations of the Terlingua quicksilver deposits, considered together with more general chemical and physical limitations, serve to indicate the probable mode of transportation and causes of deposition of the ore. In the zone of deposition, the ore-bearing fluid was a liquid or a mixed liquid and vapor, as shown by replacement of limestone. Deposition at a representative depth of 900 feet took place under the following probable conditions: a fluid pressure of about 30 atmospheres (certainly less than 66 atmospheres); a temperature near 200 degrees C (certainly less than 286 degrees C). The ore-bearing fluid contained sulfur, chlorine, iron, ammonia, and at least 10 (super -5) percent of mercury (0.1 part per million). It had a pH greater than 6. Concentration of a large part of the ore beneath relatively impermeable rocks was caused by hydrodynamic conditions that involved floating of the ore-bearing fluid on cooler and heavier meteoric water, thus largely restricting the ore-bearing fluid to the upper part of the permeable zone. Precipitation of cinnabar may have been caused by changes in temperature and pressure in the presence of a gas phase, by dilution, and to a small extent by chemical reaction with clay. Supersaturated or colloidal solutions are postulated to explain the sporadic distribution of ore on a small scale, and a catalytic effect of the clay on supersaturated solutions is suggested.