The distribution of placers containing coarse nuggets of the nickel-iron alloy, josephinite, are found to have a close spatial relationship to a narrow zone of intense shearing, serpentinization, and igneous intrusion within the Josephine Peridotite. These field relations, together with the frequent occurrence of magnetite and serpentine with the alloy, indicate that the mineral is the product of hydrothermal metamorphism and serpentinization of the peridotite. This is confirmed by the discovery of the nickel-iron in serpentine veins cutting moderately altered harzburgite. Andradite garnet, a common skarn mineral produced by contact metamorphism around igneous intrusions, is often intergrown with the nickel-iron. This may indicate that the unusually coarse grain size of the josephinite is the result of the special conditions accompanying igneous intrusion in the serpentine belt.