Dolomite occurs as a primary precipitate that cements Recent volcaniclastic sands in the shallow-marine environment of Luise Harbor, Lihir Island, Papua New Guinea. Field observations and geochemical data suggest that dolomite precipitates through complex mineral reactions in response to discharge of gas (> 90% CO2) and heated seawater from hydrothermal vents in the seafloor. Gas discharge causes the formation of shallow circulation cells, and cold seawater is drawn into the sediment, where it is heated to approximately 100°C. Reaction between hydrothermal CO2 (g), primary sediment grains, and heated seawater causes the precipitation of primary dolomite. Once temperatures are above 70°C the Mg/Ca ratio in seawater increases because CaSO4 precipitates, while at the same time the dissolution of iron oxide minerals increases the pH; both reactions favor dolomite precipitation. Ferrous iron reacts with H2S to form co-precipitated Fe-sulfide minerals. The dolomite is nearly stoichiometric and occurs as zoned inclusion-rich and inclusion-poor spherulitic cements, many of which are present as coalesced composite spherules. Oxygen isotope values for dolomite of -8.8 to -10.2‰ VPDB constrain the temperature of precipitation to be between about 77 to 110°C. Strontium isotope ratios for dolomite (average 0.70886) are close to those of modern seawater; their slightly less radiogenic compositions implicate minor addition of magmatic strontium. Hydrothermal dolomite may develop in shallow, near-surface sediments in active tectonic settings.