The Aram Chaos crater on Mars contains gray, crystalline hematite within a stack of layered sediments. The Mars Global Surveyor Thermal Emission Spectrometer (MGS-TES) and Odyssey Thermal Emission Imaging System (THEMIS) were used in conjunction with data from the MGS Mars Orbital Laser Altimeter (MOLA) and the MGS Mars Orbital Camera (MOC) instruments to investigate the nature of the hematite deposits in Aram Chaos. Superposition relationships indicate that the layered sediments in Aram Chaos were deposited subsequent to the formation of the chaotic terrain. This observation, along with the possible detection of sulfates and relatively high abundance of phyllosilicates associated with the layered units in Aram Chaos, provides evidence for the formation of the hematite-bearing units in Aram Chaos in a water-rich environment. Although there are several similarities between the hematite-bearing units in Aram Chaos and Meridiani Planum, an estimated age difference of 0.7--1.0 Gyr exists between them. This indicates that either a stable, thick atmosphere was present well into the Hesperian, or, more likely, that episodic catastrophic release of water provided a temporary environment for deposition of the Aram Chaos hematite unit similar to what existed for the deposition of the Meridiani Planum hematite unit close to 1 Gyr earlier.