The Kaidun meteorite contains carbonaceous chondrite (CM1) clasts that have been highly altered by reactions with hydrothermal fluids. Pyrrhotite in these clasts occurs as unusual needles wrapped by sheaths of phyllosilicate, and pentlandite forms veins that crosscut aggregates of phyllosilicate and garnet but not pyrrhotite. The isotopic compositions of sulfur (d34SCDT) in individual sulfide grains, measured by ion microprobe, are fractionated compared to troilite in ordinary chondrites. The sulfur in Kaidun sulfides is isotopically light (as much as -4.2 per mil for pyrrhotite and -5.7 per mil for pentlandite), unlike sulfides in other carbonaceous chondrites, which are enriched in 34S. The unusual sulfur isotopic composition of these texturally unique sulfides supports the hypothesis that Kaidun CM1 clasts were pervasively altered under extreme thermal conditions, possibly by fluids that had lost isotopically heavy SO2.