Stable isotopic compositions of cyclic Middle Pennsylvanian Gobbler Formation limestones record two stages of alteration. Early open-system meteoric diagenesis during episodic subaerial exposure stabilized cycle-top carbonate in the presence of meteoric fluid at high water/rock ratios (400-4000). Subsequent closed-system burial diagenesis stabilized meteoric and residual marine carbonate in the presence of connate pore fluids at elevated temperatures (to 150 degrees C) and low water/rock ratios (1.0-10). Present delta 18 O distributions record normal to high geothermal gradients (27-86 degrees C/km) during burial stabilization. High basin-center geothermal gradients probably resulted from elevated heat flow due to rapid crustal extension and subsidence of the Orogrande Basin during the Late Pennsylvanian. A dike-injection lithospheric extension model with 40% "oceanization" best accounts for subsidence and geothermal patterns of the Orogrande Basin.