Abundant iron oxide deposits including banded iron formations, apatite iron oxide ores, and enigmatic marble/skarn-hosted magnetite deposits occur in the Palaeoproterozoic Bergslagen region, southern Sweden. During the last 100 years, the latter deposit class has been interpreted as contact metasomatic skarn deposits, metamorphosed iron formations, or metamorphosed carbonate replacement deposits. Their origin is still incompletely understood. At the Smältarmossen mine, magnetite was mined from a ca. 50-m-thick calcic skarn zone at the contact between rhyolite and stratigraphically overlying limestone. A syn-volcanic dacite porphyry which intruded the footwall has numerous apophyses that extend into the mineralized zone. Whole-rock lithogeochemical and mineral chemical analyses combined with textural analysis suggests that the skarns formed by veining and replacement of the dacite porphyry and rhyolite. These rocks were added substantial Ca and Fe, minor Mg, Mn, and LREE, as well as trace Co, Sn, U, As, and Sr. In contrast, massive magnetite formed by pervasive replacement of limestone. Tectonic fabrics in magnetite and skarn are consistent with ore formation before or early during Svecokarelian ductile deformation. Whereas a syngenetic–exhalative model has previously been suggested, our results are more compatible with magnetite formation at ca. 1.89 Ga in a contact metasomatic skarn setting associated with the dacite porphyry.