The petrography of laterites in the Sydney district shows that source rocks range from shales—in which quartz grains are not common and average about 0.03 mm in diameter—to sandstones, with generally abundant quartz grains which may average up to 0.5 mm in diameter. Ferricretes or iron‐cemented duricrusts occur in rocks with coarser quartz grains, such as the Tertiary river gravels of the Maroota area. The porosity and permeability of these rocks have considerably influenced the nature and profiles of the laterites. Two possible sources of sesquioxides in the laterites appear to be the Wianamatta Shale and, perhaps more importantly, basic igneous rocks.