Geologic investigations with the submersible Nautile in the Lau basin represent one of the first detailed studies of hydrothermal activity on a modern back-arc volcanic ridge, the Valu Fa Ridge. Three major hydrothermal fields (Hine Hina, Vai Lili, and White Church) were discovered in the areas of the greatest differention of volcanic rocks. The type of hydrothermal deposit is controlled by the type of volcanism and by tectonic activity which increases from south to north. Three stages of sulfide formation are proposed. During the first stage (Hina Hina field), diffuse discharge through volcaniclastic material produces extensive Fe-Mn oxide crusts covering sulfide deposits within the volcanic material. During the second stage (Vai Lili field), tectonic activity increases and fault-controlled discharge forms chimneys on the sea floor. Diffuse discharge is still present. During the third stage (White Church field), hydrothermal activity is completely controlled by major faults and results in the development of sulfide mounds. Vent fluids at Valu Fa have much higher metal contents than those at midocean ridges. Cl enrichment is best explained by mixing with deep brine rather than by subcritical phase separation and there is no evidence for a magmatic fluid contribution. Some characteristics of the fluids, such as low pH (2) and low concentration of H2S, can be explained by subsea-floor sulfide formation. The water-rock reaction zone is estimated to be about 1 km below the sea floor and 2 km above the magma chamber. Vertical mineralogical zonation within the mound differs from midocean ridge deposits but is similar to that of a kuroko deposit. At the surface of the deposit, the virtual absence of pyrite and the high amount of sphalerite, barite, tennantite, galena, and locally, native gold are remarkable. The distinctive chemical characteristics of deposits in each volcanic segment are explained by interaction with variable amounts of differentiated rocks. Compared to midocean ridges, Lau basin deposits are enriched in Ba, Zn, As, Pb, Ag, Au, and Hg and depleted in Mo, Se, and Co. Relative to young intracontinental back-are basins (e.g., Okinawa trough), the mineralizations are Pb and As poor. Their mineralogy, chemical composition, and geologic setting show that the southern Lau basin deposits are intermediate between oceanic and continental back-are deposits.