The Middle Ordovician Ottosee Formation of eastern Tennessee consists of a thick wedge of calcareous shale containing isolated lenses of oolitic limestone. The individual ooids contain authigenic/diagenetic Fe-chlorite (30% FeO) growing between subrhombic calcite grains and forming Fe-chlorite molds. Fe-chlorite is not present in the cement. Where present in low concentrations, it occurs in both concentric and radial patterns. The concentration of Fe-chlorite increases as stylolites are approached, particularly the 1- to 10-mm thick (width of non-carbonate layers) bed-parallel stylolites. The Fe-chlorite can form cardhouse spheres and compose up to 9% of a calcite ooid. The stylolites and the surrounding shale contain appreciable illite and I/S (9:1). Strings of partially dissolved half-moon ooids, consisting largely of Fe-dolomite and Fe-chlorite, form pseudo-stylolites. The Fe-chlorite and Fe-dolomite were early pre-cement phases deposited under reducing conditions. The Mg was supplied by Mg-calcite; the Fe was probably transported as Fe-organic complexes in the interstitial waters from the surrounding shales. During the later stages, transport was via the stylolites. Al, Si, and K were obtained from detrital illite-I/S, probably bound to the ooids by algal mucilage or humic substances. The Fe-chlorite presumably crystallized with the lower temperature Ib structure and was later transformed to the IIb structure at a burial temperature between 150-200 degrees C.