Located in the middle part of the Changyi-Anqiu iron ore belt, the Lianhuashan iron ore deposit is considered to be a sedimentary metamorphic iron ore deposit occurring in the Xiaosong Formation of early Paleozoic Fenzishan Group. A comparative study of rock mineral composition, host rock and structure characteristics between this deposit and the skarn iron deposit shows that the Lianhuashan deposit is similar to the banded iron ore deposit. The REE values of the ore deposit are low. The shale-normalized REE patterns show relative depletion of LREE and enrichment of HREE, with obvious Eu, Y and La anomalies and no visible Ce anomaly. These characteristics indicate that REE of the Lianhuashan iron ore deposit originated from the mixture of volcanic hydrothermal and seawater. Y/Ho ratios show that the Lianhuashan iron ore deposit was metasomatised by seawater during its deposition. Trace elements, such as Ti, V, Co, Ni, Mn, Sr and Ba, are of low content. In the primary mantle-normalized trace element patterns, U, La and Hf have positive anomalies, Ba, Nb, Ta and Sr show negative anomalies, and ratios of SiO₂/Al₂O₃, Ni/Co, Sr/Ba and Ti/V indicate that the ore-forming materials were derived from the sedimentation of the volcanic matter. This study suggests that ferruginous material of Lianhuashan BIF was associated with volcanic hydrothermal solution and formed in a marine chemical sedimentary environment.