Near-global (60¿S to 60¿N) thermal infrared mapping by the Thermal Emission Spectrometer (TES) on Mars Global Surveyor has revealed unique deposits of crystalline gray hematite (α-Fe2O3) exposed at the Martian surface in Sinus Meridiani, Aram Chaos, and in numerous scattered locations throughout Valles Marineris. The Sinus Meridiani material is an in-place, rock stratigraphic sedimentary unit characterized by smooth, friable layers composed primarily of basaltic sediments with ~10--15% crystalline gray hematite. This unit has outliers to the north that appear to have formed by stripping and removal. The hematite within Aram Chaos occurs in a sedimentary layer within a closed basin that was likely formed during the basin infilling and predates the formation of nearby chaos and outflow terrains. This unit appears to be exposed by erosion and may be more extensive beneath the surface. The Valles Marineris occurrences are closely associated with the interior layered deposits and may be in place within the layers or eroded sediments. Overall, crystalline gray hematite is extremely uncommon at the surface, yet in all observed locations it is closely associated with layered, sedimentary units. Here we argue that these hematite deposits have formed by a process involving chemical precipitation from aqueous fluids, under either ambient or hydrothermal conditions. Thus the TES mineralogic data provide evidence that liquid water has been stable at or near the surface, probably for millions of years by analogy with terrestrial iron formations, in specific locations on early Mars. ¿ 2001 American Geophysical Union