Calcite cementation of aragonite ooid sand is producing oolite on Joulters Cays, Bahamas. During the last 1,000 years, calcite cement has formed at an average rate of between 27 and 55 cm3 /m3 /yr and is derived from dissolution of ooid aragonite in fresh water. The dissolution-reprecipitation of carbonate minerals in the aquifer results in ground waters of unusually high Sr content. Sea water and mixtures of fresh and sea water appear to inhibit cementation. A pronounced cement fabric change occurs across the water table and has produced an obvious petrographic record of fresh-water diagenesis. Above the water table, cement is typically near grain contact positions, where water is held by capillarity; below the water table, cement is more randomly distributed around grains. At the water table a transition zone, 1 meter thick, marks the boundary between cement textures. No porosity reduction is associated with cementation; calcite cement precipitation is apparently compensated by an equal or greater amount of aragonite dissolution in the interval undergoing cementation. Permeability is more variable above the water table than below it, reflecting early channelling of flow patterns in the vadose zone. Effective permeability below the water table is one to two orders of magnitude higher than above the water table because of entrained gas in the vadose zone. This permeability difference promotes preservation of unstable minerals above the water table and continued diagenetic alteration below the water table.