Utö is a key reference locality in the Bergslagen mining district, preserving a well-exposed Palaeoproterozoic volcanosedimentary succession associated with stratiform Fe-oxide and polymetallic sulphide mineralisation. Despite its importance for regional ore genetic models, the mineralisation and associated hydrothermal alteration at Utö have not previously been documented using modern field-based and geochemical methods. This study presents new stratigraphic, petrographic, whole-rock geochemical, and sulphur isotope data from northeastern Utö, based on detailed field mapping and drill-core logging of felsic volcanic footwall rocks. The succession records a transition from detrital marine sedimentation to felsic volcaniclastic deposition, followed by volcano-distal ash-siltstone and carbonate sedimentation during waning volcanism in a shallow-marine basin. Stratiform magnetite–hematite and Zn–Pb–Ag sulphide mineralisation occur at the same narrow stratigraphic level within interbedded volcanic ash siltstones and limestones and preserve features consistent with submarine exhalative deposition. Sulphur isotope compositions (δ³⁴S = −8.9 to +7.2 ‰, V-CDT) overlap the range reported for stratiform sulphide deposits elsewhere in Bergslagen and indicate dominantly magmatic sulphur with variable seawater sulphate contribution. Hydrothermal alteration of the felsic volcanic succession is spatially heterogeneous and dominated by potassium enrichment, with locally developed stratabound and structurally controlled magnesium-rich alteration zones now expressed as cordierite due to amphibolite-facies metamorphism. Whole-rock geochemical data indicate depletion of iron and base metals in Mg-altered rocks, whereas K-altered rocks show no systematical metal depletion. Utö represents a small-scale, shallow-marine exhalative system that shares characteristics with exhalative iron oxide and sulphide deposit, as well as carbonate replacement deposits elsewhere in Bergslagen. The study of this deposit and its hydrothermal envelope help to define the range of hydrothermal ore forming systems and their environmental control in Bergslagen.