A nephrite jade deposit within the Great Serpentine Belt of N.S.W., near Tamworth, occurs as several tabular bodies up to 3.5 m thick on the serpentinite country‐rock contact. The occurrence is interpreted as a low‐temperature reaction zone, similar to those observed around Alpine serpentinites elsewhere. The nephrite probably formed as a result of dynamothermal metasomatism associated with the emplacement of serpentinites along the Peel Fault.