The most plausible models for the origin and evolution of a unique geologic unit in Meridiani Planum, Mars, are low-temperature precipitation of Fe oxides/oxyhydroxides from standing water, precipitation from circulating fluids of hydrothermal origin, or the thermal oxidation of magnetite-rich ash. Analysis of Odyssey Thermal Emission Imaging System (THEMIS) infrared and visible images, together with MGS TES, MOLA, and MOC data, has provided additional insight into the Meridiani region. The hematite at Meridiani was most likely derived from a Fe oxyhydroxide precursor such as goethite, is mixed with basalt as the major component, occurs as a thin layer meters to <200 m thick, and is thermophysically distinct from units immediately above and below. Remnants of a hematite-poor unit lie directly above the hematite layer, indicating that hematite formation was sharply confined vertically. The hematite unit appears to embay preexisting channels and occurs only as outliers within closed crater basins, suggesting that it was deposited in a gravity-driven fluid, rather than as a dispersed air fall. The hematite unit lies within a topographic trough over ~3/4 of its circumference, with the remaining perimeter <150 m lower in elevation. Oxidation of ash during emplacement is unlikely given a goethite precursor and basalt as the major component. Hydrothermal alteration does not account for the confined vertical extent of the hematite layer over large distances and across disconnected outliers. The preferred model is the deposition of hematite or precursor Fe oxyhydroxides in water-filled basins, followed by dehydroxylation to hematite in low-temperature diagenesis. This model accounts for (1) the uniform deposition of a thin hematite-bearing unit over an area ~150,000 km2 in size; (2) the transition from hematite-rich to hematite-poor units over less than ~10 m vertical distance; (3) the distinct differences from the underlying layers; (4) goethite as the precursor to hematite; (5) the embayment relationships; (6) the occurrence of remnants of the hematite-bearing unit in isolated craters surrounding the main deposit; (7) the lack of other hydrothermal minerals; and (8) the presence of coarse-grained, low-albedo basalt, rather than ash, as the major component. The occurrence of unweathered olivine, pyroxene, and feldspar throughout the equatorial region provides strong evidence that extensive aqueous weathering has not occurred on Mars. Thus the presence of a small number of bodies of standing water appears to represent brief, localized phenomena set against the backdrop of a cold, frozen planet.