There is described a new occurrence of mud limonite iron ore in this paper. Limonite originates recently in streams situated in flood plain of the Morava River near Hulín (central Moravia, Czech Republic). The chemical composition of precipitated limonite indicates that a contamination of subterranean waters by phosphorus, arsenic and some transitional metals (Cr, Zn) occurs here, very probably due to long-lasting intense agricultural usage of the surrounding fields. Based on experimental precipitation of limonite from local well water, a probable mechanism of formation of limonite was outlined. The Fe2+ ions, dissolved in the subterranean waters, are after their seepage into the stream oxidized by aerial oxygen to Fe3+, which is subsequently hydrolysed and precipitated in form of solid iron hydroxide. An important role of microorganisms and/or organic matter during precipitation of limonite is not suggested by collected data.