A study of two laterite profiles developed on a serpentinite near Rockhampton, shows that loss of Si02 and MgO results in the relative concentration of Fe203, A1203 and a number of minor elements. Serpentine is broken down to form montmorillonite, goethite, quartz and kaolinite. Enrichment of nickel occurs, and it is shown that the element is mainly associated with montmorillonite and serpentine. Highest nickel values are associated with a zone in the profile which occurs at a depth of 10.5-22 metres, and the bulk of the nickel in this zone (42-80%) is associated with the <25p fractions.>