The occurrence of palygorskite and its formation conditions in soils and sediments were studied along a transect covering granitic hilly lands to marly hilly lands in southern Mashhad. Based on formation conditions, amount and morphology, three kinds of palygorskite including high-amount palygorskite with long fibers in gypsiferous marl and basal part of deep loess deposits with high salinity, moderate-amount palygorskite which was mostly transported in association with carbonates and gypsum during calcic and gypsic horizon formation, and small-amount aeolian transported detrital palygorskite in non-altered loess deposits were distinguished. Palygorskite occurrence in Miocene marl is in line with the former investigations in central Iran. It shows similar conditions prevailing in this region and central and southeastern Iran and the formation of shallow and saline lakes and lagoons following the disappearance of the Tethyan seaway. Similar investigations around the world confirm that Tertiary sediments are the major source of palygorskite in the world.