The remarkable occurrence of more than 4,500 conical siliceous mounds in an area of less than 1.5 square kilometres has been reported in the Paraná basin, near Anhembi, São Paulo, in southeastern Brazil. These structures, which are up to two metres high, are thought to have been formed at the margin of a very shallow, broad but waning internal sea, and it was originally suggested that they are stromatolites. Yet their restricted occurrence, unusual abundance and nearly pure siliceous composition have never been satisfactorily explained by this hypothesis. Here we report field and laboratory observations on their shape, construction, composition and mineralogy. On the basis of our data we suggest that the conical mounds are the result of subaqueous Late Permian vent activity in southwestern Gondwana. The present siliceous cone field differs considerably from other Palaeozoic siliceous hot spring deposits, such as those at Rhynie, Scotland, and the Drummond basin, Australia, and therefore represents an unusual occurrence of vent activity.