Hematite coatings are common on vertebrate fossils from Paleocene/Eocene paleosol deposits in the Bighorn Basin, Wyoming. In general, hematite coatings are found only on fossils and are limited to soils exhibiting hydromorphic features and moderate maturity. Petrographic and isotopic evidence suggests that hematite and micritic calcite formed at nearly the same time in a pedogenic environment, whereas sparry calcite formed later at greater burial depths. The parent material of paleosols is rich in iron, supplying an ample source of iron for hematite formation. Decomposition of animal tissues around bones may enhance the weathering of iron-bearing minerals in soils surrounding carcasses, while the bones might provide favorable sites for iron accumulation. The predominance of discrete smectite, together with regional geothermal history, suggests that burial temperatures have not exceeded 70 degrees C. Hematite coatings on fossils can serve as a substrate for geochemical analysis in continental paleoclimatic research, owing to their pedogenic origin, abundance, and resistance to diagenetic alteration.