Reconnaisance ALVIN dives in the sediment-filled southern trough of the Guaymas Basin found active hot springs with temperatures ranging up to 315°C. High temperature activity is generally restricted to the crests of large mounds that rise out of the flat-lying basin sediments. The chemistry of the hydrothermal waters is distinctly different from that characteristic of sediment-starved, open ocean ridge axes in that the solutions are alkaline, contain ammonium as a major ion and are strongly depleted in the "ore-forming" metals. These compositions are interpreted as the result of reaction of a primary solution, similar in composition to those as 21°N, EPR, with the biogenous sediments overlying the intrusion zone. The pH of this fluid is raised both by the dissolution of carbonate and the addition of ammonium from thermocatalytic cracking of immature planktonic carbon. Metal sulfides are consequently precipitated at depth in the sediment column. The Guaymas Basin is thus the site of active formation of a sediment-hosted massive sulfide mineral deposit; the exiting waters are the "spent" ore-forming fluid. The ammonium data demonstrate that organic carbon (black shale) is, by itself, a sufficient source of alkalinity to induce the precipitation of sulfides from ascending solutions. Since ammonium does not participate directly in these reactions but does form secondary aluminosilicate minerals these latter should constitute a valuable exploration tool in the search for shale hosted deposits.