Clay minerals are locally abundant in two hydrothermal areas at Mount Baker-Sherman Crater and the Dorr Fumarole Field. The silt- and clay-size fractions of volcanic debris that is undergoing alteration at and near the ground surface around areas of current fumarolic activity in Sherman Crater are largely dominated by alunite and a silica phase, either opal or cristobalite, but contain some kaolinite and smectite. Correspondingly, the chemistry of solutions at the surface of the crater, as represented by the crater lake, favors the formation of alunite over kaolinite. In contrast, vent-filling debris that was ejected to the surface from fumaroles in 1975 contains more than 20 percent clay-size material in which kaolinite and smectite are dominant. The youngest eruptive deposit (probably 19th century) on the crater rim was also altered prior to ejection and contains as much as 27 percent clay-size material in which kaolinite, smectite, pyrophyllite, and mixed-layer illitesmectite are abundant. The hydrothermal products, kaolinite and alunite, are present in significant amounts in five large Holocene mudflows that originated at the upper cone of Mount Baker. The distribution of kaolinite in crater and valley deposits indicates that, with the passage of time, increasingly greater amounts of this clay mineral have been incorporated into large mass movements from the upper cone. Either erosion has cut into more kaolinitic parts of the core of Sherman Crater, or the amount of kaolinite has increased through time in Sherman Crater.