It is now widely accepted that the composition of seawater varied significantly during the Phanerozoic, and that the Mg/Ca ratio of seawater is a major factor in synchronized secular oscillations in the mineralogical composition of marine evaporites and nonskeletal as well as biogenic carbonates. However, the nature of the Mg sink is still subject to debate. We describe early diagenetic sepiolite from the Chihsia Formation (middle Permian) of South China. The Mg incorporated in sepiolite likely was furnished by stabilization of high-Mg calcite, and silica was derived from siliceous fossils. Two factors facilitated the accumulation of sepiolite in the Chihsia Formation. The first is a Chihsian depositional environment of an intra-oceanic carbonate platform that lacked detrital terrestrial input, which enhanced the availability of biogenic silica for sepiolite formation. The second is the chemical composition of Permian seawater, as the precipitation of high-Mg calcite was aided by a high Mg/Ca ratio associated with an aragonite sea. The formation of sepiolite is significant in constraining the recycling flux of Mg during recrystallization of carbonate sediments with a high proportion of high-Mg calcite (periods of aragonite seas). Worldwide, major occurrences of marine sepiolite and palygorskite in the Phanerozoic correlate with periods of aragonite seas. This temporal distribution implies that minerals of the sepiolite-palygorskite group play an important role in the geochemical recycling of Mg, and that major sepiolite and palygorskite deposits indicate episodes of high Mg concentrations in seawater. The formation of sepiolite also was probably related to an abundance of silica-secreting organisms, which interacted with the chemical evolution of Phanerozoic seawater. In addition, authigenic sepiolite and palygorskite are not indicators of arid and semiarid climates.