Geochemical and mineralogical investigations of the Lower Permian Kemmlitz rhyolite within the NW-Saxonian Basin (Germany) and associated lithophysae (high-temperature crystallization domains) as well as agates were carried out to constrain the genesis and characteristics of these volcanic rocks and the origin of the agate-bearing lithophysae. The volcanic rocks of rhyolitic composition are dominated by quartz, sanidine, and orthoclase and most likely derive from lava flows. Agate-bearing lithophysae were exclusively formed in a glassy facies (pitchstone) of the rhyolites, which was afterwards altered to illite-smectite mixed-layer clays. The results of this study show that agate formation can be related to the alteration of the volcanic rocks accompanied by the infill of mobilized silica into cavities of lithophysae. Fluid inclusion studies point to temperatures of agate formation above 150 °C, indicating that the mobilization and accumulation of silica started already during a late phase of or soon after the volcanic activities. Remarkable high concentrations of B (29 ppm), Ge (> 18 ppm), and U (> 19 ppm) as well as chondrite-normalized rare earth element (REE) distribution patterns of the agates with pronounced negative Eu-anomalies, slightly positive Ce-anomalies and enriched heavy rare earth elements (HREE) indicate interactions of the host rocks and transport of SiO2 with magmatic volatiles (F/Cl, CO2) and heated meteoric water. Characteristic yellow cathodoluminescence (CL), heterogeneous internal textures as well as high defect density of micro- and macrocrystalline quartz detected by electron paramagnetic resonance (EPR) spectroscopy point to crystallization processes via an amorphous silica precursor under non-equilibrium conditions.