Neutral and ionic forms of sodium form narrow, well-defined layers which peak in the 90--95 km altitude region at midlatitudes. A new theory for the sodium layer is presented, which is found to be in good agreement with existing atmospheric observations as well as available laboratory measurements of rate constants. The layer is believed to result naturally from a meteor ablation source over a chemical sink with vertical transport of Na+ playing an important role in the layer shape and variation. While the neutral chemistry is believed to consist of chemical equilibrium between Na and NaO, the ion chemistry departs from earlier studies and considers a cluster ion scheme. It is possible that higher-order cluster ions of sodium play a role in the formation of aerosols, through attachment or ion-induced nucleation processes.