The field observations, mineralogical, and magnetite mineral-chemical data of the Baba Ali iron deposit show that they are comparable to those of skarn type and hydrothermal deposits. It seems that the Baba Ali iron deposit is genetically related to Fe-enriched hydrothermal fluids, which exsolved from the primary dioritic magma at depth. The results indicate that the iron was transported by exsolved hydrothermal fluids of magmatic origin (that later evolved with higher level meteoric water interaction), which are capable of carrying significant concentrations of iron in the form of chloride complexes within saline brines at high temperatures. These deposits are consistent with hydrothermal precipitation of magnetite as a result of decompression, decreasing temperature, decreasing oxygen fugacity, and increasing pH at the final stage of mineralization due to reaction with sedimentary carbonate host rocks.