Increasing use of rare earth elements (REE) in many new technologies results in their increasing presence in the environment and consequently in natural water systems. The Zrmanja River estuary represents a small, semi-closed system located in a karstic landscape of the eastern Adriatic coast characterised by the prevailing red soil (terra rossa) cover, numerous bauxite pits and the proximity of a decommissioned alumina plant, i.e. sources of geomaterials enriched in rare earth elements. To study the influence of such a substrate on estuarine sediment geochemistry, distribution of REEs in the surface sediments of the Zrmanja River estuary and surrounding soils were investigated. Both sediment and soil samples displayed significant variation in terms of REE concentrations as well as their normalised patterns, with overall highest REE levels measured in bauxitic soils (ΣREE 333–596mgkg−1); up to an order of magnitude higher than in other samples. In estuarine sediments, ΣREE ranged from 29.7mgkg−1 to 180mgkg−1, and displayed an increase along the estuary transect. Highest levels of rare earths in sediments of the Zrmanja River were observed in locations closest to the former alumina plant, indicating a transfer of particles rich in REE from the anthropogenically degraded environment in the vicinity of the factory and its influence on the geochemistry of the estuarine sediments. Sediment REE normalised patterns and associated fractionation parameters (ΣLREE/ΣHREE, (La/Nd)NASC, (La/Yb)NASC) showed similarity to those observed for soil samples, confirming a significant influence of local lithological and pedological setting on the sediment REE composition. Moreover, spatial changes in these parameters in sediments clearly followed the changes in nearby soils and can be differentiated on a relatively small scale. •Geological setting enriched in REEs influences estuarine sediment geochemistry.•Influence of lithology on REE sediment composition differentiated on a small scale.•Origin of various geological materials in aquatic systems can be traced by REEs.•REEs levels and fractionation patterns can be used for pollution assessment.