The Fort Union Formation of the northern Bighorn Basin is a complex sequence of interbedded fluvial, lacustrine, and palustrine deposits. A probable lacustrine facies is well developed near the center of the basin. These Tiffanian-age sediments, here designated the Belfry Member, consist of thin, laterally persistent beds of fine-grained lenticular and tabular sandstones, shale and mudstones, lignite, and argillaceous or fossiliferous limestone. In general, their lithologic characteristics, particularly the abundance of sandstones, are very different from those normally associated with lacustrine sequences, and may be misinterpreted as fluvial deposits. Two sections (Cody Road and Silvertip) were examined in detail. Sandstones are generally carbonate-cemented phyllarenites. Compositional differences exist between the two sections, with Silvertip having better textural maturity and more chert. Most limestones are argillaceous micrites, but biomicrudites are found in the upper Silvertip section. Mudstones and shales contain smectite, interstratified smectite-vermiculite, kaolinire, illite, and chlorite separable into 4 major assemblages. These alternate irregularly throughout the sections, but assemblages without an expandable clay occur only in the upper part of Silvertip. The Belfry lakes were apparently shallow and of limited areal extent, with fluctuating water levels and low-energy, muddy shorelines. Clastic input from the rising Beartooth and Bighorn mountains was high, but composition of carbonates and clays suggests that the lake waters were alkaline, slightly saline, with generally sluggish circulation and mildly reducing bottom conditions.