Bleaching clay deposits of the Sanders-Defiance Plateau district, northeastern Arizona, are an important commercial source of activated bentonite. High-grade deposits show a definite association with geologic structure, distribution of the host formation, type of parent tuff and degree of subsequent alteration, and both the pre- and post-clay erosion pattern.The district is located along the western and southern flanks of the Defiance Plateau. The DeChelly sandstone crops out in the central portion of the uplift and is successively overlain in places by the Moenkopi and Shinarump formations; the younger Chinle formation crops out in a belt around the flanks of the uplift. The Bidahochi formation of Pliocene age unconformably overlies the Chinle and older formations in the district.Accompanying the Laramide upwarping of the Defiance Plateau a broad shelf area was developed along the southwestern edge, flanked by a westward dipping monocline. The Defiance Uplift and the monocline restricted the areal distribution of the Bidahochi sediments to the shelf area. Channeling of the shelf area occurred during deposition of the lower member to the west. Volcanic ash falls occurred during deposition of the Bidahochi sediments. The ash was further accumulated in the depositional traps of the shelf area by erosion.The course of alteration of vitric tuff to bentonite is traced by field observation, microscopical examination, and x-ray analyses. The ratios of ions present in the tuff (latitic) and bentonite (calcium montmorillonite) are calculated from chemical analyses, and an equation is written for the chemical reaction between the rocks expressed in rock-cell formulas.Combination with water is the first step in the alteration. Mg has been added; and silica, Na, and K have been removed. Al is taken to have remained essentially static because it was presumably flocculated by the presence of excess divalent Ca and Mg ions.All known bleaching clay deposits of the district occur in close proximity to: (a) a belt confined to the shelf area, and (b) the approximate stratigraphic position of the medial volcanic member of the Bidahochi formation.The channel and basin structures, locale of the vitric ash accumulations, were developed as a result of regional structures. Within any depositional trap, smaller-scale structural features further controlled the accumulation of ash and subsequent-development of bleaching clays. These small-scale features may result from: (a) local squeezing, (b) inequalities of the depositional basin or channel, and (c) erosion having removed the clay since deposition and its alteration. The drainage pattern of the larger modern streams coincides somewhat with the Pliocene post-clay pattern. If by comparison the ancient channel was large, it probably removed the clay by an erosional cut-out feature.The best prospects for developing new deposits in the district lie within: (a) the areal extent of the shelf area, (b) those Bidahochi sediments immediately overlying this structural shelf in the older rocks, and (c) parent vitric ash accumulations that are latitic in composition. Favorable areas in the district are outlined.An estimated total output for the district (1924-1954) is 4,650,000 tons.