•Palaeosol associated with Upper Jurassic unconformity hosts glauconite.•Glauconite formed by halmyrolysis of a palaeosol.•Formation of glauconite was microbially mediated.•Glauconite may mark initial flooding of subaerially exposed terrain.•Glauconite as an indicator of paleolandscape and paleoenvironment. Glauconite formation is generally perceived as a process occurring in deep-marine environments, but in the last few decades its formation in shallow-marine environments is progressively more recognised and utilized for palaeoenvironmental reconstructions. One such example is the lower Kimmeridgian to upper Tithonian Zlatni Rt palaeosol, which is especially unique since the glauconite occurrence is hosted within the palaeosol material. Micromorphological, mineralogical, and chemical characterisation of the palaeosol was followed by the detailed analysis and description of glauconite using SEM-EDS, XRPD and FTIR. In addition, lithofacies and micropalaeontological analyses have been carried out on the carbonate succession under- and overlying the palaeosol in order to better understand the stratigraphic framework. The palaeosol formed in hydromorphic conditions, in contact with brackish to marine porewater, and is composed of mixed-layer illite–smectite, illite, kaolinite, vermiculite, pyrite, marcasite and titanium oxides. The glauconite was formed after the formation of the palaeosol, predominantly through fixation of potassium and iron into illite and mixed–layer illite–smectite, while part of the glauconite formed authigenically, with evidence for microbial influence. The glauconite is present in a more oxidised and more reduced form, which alternate together with pyrite in veins, indicating fluctuations in the redox potential. This can be connected to the variations in the supply of organic matter and sea-level oscillations during the initial stages of the transgression. Glauconite formation was locally followed by the formation of transgressive breccias and a complete drowning of the area. During this phase lagoonal Kirmenjak limestone was deposited throughout the area, while in the palaeosol coarse pyrite crystals precipitated. Presented study documents a unique glauconite occurrence and proposes that it can be successfully used for the detailed palaeoenvironmental reconstruction of the initial flooding of subaerially exposed terrains.