A thin but laterally extensive stratiform manganese formation interbedded with limestone, of the Neoproterozoic Penganga Group near Adilabad in Andhra Pradesh, India, which has been described in literature as primary sedimentary oxide deposit, has recently been found to have developed from a manganese carbonate protore composed of laminated and microoidal rhodochrosite and kutnohorite. Models for the origin of the ore thus have to be revised. Sedimentological evidence suggests that the manganese was deposited on the outer shelf of a carbonate platform following a major transgression. Petrographic and geochemical evidence is provided showing that the carbonate microoids originated immediately below the sediment-water interface during very early diagenesis. Microbially mediated suboxic diagenesis and reduction of hydrogenetically precipitated Mn (super 4+) oxihydroxides by organic carbon were instrumental in the formation of the manganese carbonates.