Seventeen geological sections were studied in the Gercus Formation, east of Dohuk city, with sampling of all exposed palygorskite-rich claystone beds. The thickness of these beds ranges between few centimeters to three meters. Forty eight claystone samples were analysed by X-ray diffraction and five of these samples were examined by transmission electronic microscopy. Mineralogically, these claystones consist basically of palygorskite, montmorillonite and dolomite with small amounts of kaolinite, quartz, chlorite, calcite and feldspar. For the first time in Iraq, this study succeeded in separating the palygorskite from the other associated minerals in the claystones. Eight samples were purified to separate the palygorskite using a developed purification procedure. The percentage of the palygorskite in the separated samples ranged between 90 – 100%. The separated palygorskite was studied minerlogically by X-ray diffraction, thermogravemetric analysis and Infrared. The palygorskite is well crystalline and includes several forms of water which were lost when heated above 900 °C. Palygorskite appears as elongated authigenic fibers aggregated forming weak bands; each band includes 2 – 12 fibers or more. The lengths of the fibers are mostly less than 8 µm and the width is about 0.1 µm mainly with straight edges and euhedral shape. Various patterns were observed in the studied palygorskite represented by short palygorskite fibers emerge from the montmorillonite grains. This feature and the sharp peaks of XRD and infrared patterns promote the authigenic formation of the studied palygorskite from montmorillonite in a shallow marine (restricted) environment in a warm temperature and high pH value as well as the enrichment of Mg in the sedimentary basin. The direct precipitation theory for the formation of the studied palygorskite cannot be applied. The origin of montmorillonite is detrital, transported to the depositional basin from the weathering of continental detritus.