Field work in southern Montana has led to the discovery that in certain folds on the flanks of the Bighorn Mountains, the Chugwater redbeds exposed along the crests of minor anticlines are bleached to a clean white color. Oil seeps were noted in the Chugwater sandstone at the south end of one of these anticlines along the Little Bighorn River. Later a much larger mass of oil-saturated rocks was found in the Chugwater formation on the Black dome, southeast of Bridger. These occurrences suggest that oil migrating through the sands causes a reduction of the ferric oxide pigment to a soluble ferrous form in which solution and removal take place. Laboratory experiments showed that no appreciable reduction took place unless the temperature was raised enough to cause cracking of the oil. At such temperatures the reaction was rapid. Further investigation resulted in the discovery that hydrogen sulphide reduces ferric oxide in the cold. This fact has long been made use of by gas chemists in purifying coal gas. In the case of the bleaching near Bridger, it is clear that hydrogen sulphide is a possible agent, for in that locality a spring of water containing a large quantity of that gas was noted. Hydrogen sulphide has been shown to be a common constituent of waters associated with oil. Such waters would probably follow or accompany oil escaping through fissures in an anticline. Therefore, although the bleaching is probably not due to the action of the oil itself on the ferric oxide, it may be considered as a phenomenon associated with the movement of oil through th rocks. Consequently any anticlines whose crests are marked by bleached redbeds should be regarded with suspicion unless possibilities of production exist at a considerable depth.