The Mercer Formation in the Northern Appalachian Basin has long been mined in central Pennsylvania for its coal and claystone deposits. Early investigations by the U.S. Geological Survey also documented substantial lithium (Li) enrichment in the claystones, but the origin and distribution of it remains poorly constrained. Integration of new and published sedimentological, paleontological, and geochemical data indicates that the formation accumulated in a tropical floodplain within an ancient river-delta system. We combine the published information with new data to develop high-resolution chemostratigraphic and sequence stratigraphic frameworks to resolve lateral and vertical Li variations in Mercer claystones. We find that Li enrichment is greatest in areas historically mined for refractory clay, particularly within kaolinite-dominated claystones containing abundant fossil roots, soil slickensides, pervasive siderite spherules, and aluminum oxyhydroxides such as diaspore and boehmite. These features record intensive weathering and pedogenesis of aluminosilicate parent materials modulated by complex redox conditions. Li is interpreted to be structurally bound within aluminosilicate lattices, likely in the octahedral layers of chlorite or illite. These minerals most likely formed through pedogenic alteration of fine-grained, Li-bearing volcanogenic material or through subsequent burial diagenesis of Li-adsorbed clays.