Clay minerals from Middle Jurassic lagoonal mudrocks, siltstones and silty fine-grained sandstones of the upper Great Estuarine Group (Bathonian) are divided into four assemblages. Assemblage 1, the most common assemblage, is rich in mixed-layer illite–smectite with attendant illite and kaolinite. Assemblage 2 is dominated by smectitic clay. These assemblages are indicative of primary Jurassic deposition. Illite and kaolinite were probably derived from the weathering of older rocks and soils in the basin hinterland and were deposited in the lagoons as river-borne detritus. The majority of smectite and mixed-layer illite–smectite is interpreted as the argillization product of Jurassic volcanic dust, also deposited in the lagoons by rivers. Near major Tertiary igneous intrusions these depositional clay mineral assemblages have been altered. Assemblage 3 contains smectite-poor mixed-layer illite–smectite, whilst Assemblage 4 contains no smectitic clay at all. Destruction of smectite interlayers occurred at relatively shallow burial depths (< 2500 m) due to enhanced geothermal gradients and local convective hot-water circulation cells associated with the major Tertiary igneous intrusions.