A sequence of limestone and chert in the central portion of the Durham Sub-basin of the Deep River Basin of North Carolina is unusual for these continental beds. At the best outcrop an 8.8 m section of typical red-brown mudstone and sandstone contains continuous but wavy-bedded layers of impure limestone from 1 to 20 cm thick. They are dark laminated micrite which is non-porous, pelletoidal, chemical, and lacustrine in origin. Void-filling medium crystalline calcite spar has eliminated most of the original pore spaces. There may be a caliche fabric overlay on this limestone, which was originally a calcareous tufa. A few beds of chert up to 60 cm thick are associated with the limestone. The chert is of two types. One is a dense dark gray chert which is medium crystalline chalcedony with a very finely crystalline quartz. It is probably an inorganic precipitate and is comparable to the silica gel being. deposited in certain lakes in South Australia. The second is a light brown porous chert which has replaced some of the previously mentioned limestone. Calcite nodules of typical caliche fabric were formed around the periphery of this Triassic lake which had Mg/Ca ratios of less than 7 and a fluctuating pH of 6.5-10.5. The lake was a playa which formed in a warm to hot climate with a mean annual temperature of about 20 degrees C and a seasonally distributed rainfall of 100 to 500 mm. These playa and caliche deposits lie in the center of the Durham Sub-basin within a Late Triassic sequence which contains both fluvial and lacustrine strata. The latter also contain both gray and red lacustrine shales which contain fish scales, ostracods, and conchostracans. The Newark strata were probably deposited during a time of cyclic climate that ranged from dry to moist and back again. The coals of the Sanford Sub-basin and some of the lacustrine shales of the Durham Sub-basin were deposited during the wet parts of the cycles. The lacustrine limestones and chert were deposited, and the caliches formed, during the dry parts of the cycles.