Nundorite is a unique and enigmatic rock type, known only from its type locality within the Koonenberry Belt of western NSW. The rock is highly anomalous in geochemical composition being peralkaline, with low silica and high alumina, but enriched in rare metals such as Zr, Nb and rare earth elements. This study presents a comprehensive mineralogical and geochemical study of nundorite to resolve its origins and its potential to inform on the geological processes that lead to critical metal concentration in the crust. Nundorite is found only at a single outcrop but shows a progression of alteration and deformation over ∼250 m from the northwest to southeast. The least deformed varieties consist of coarse aegirine grains within a matrix composed predominantly of natrolite and microcline with minor albite, nepheline and schizolite. With increasing deformation, the proportion of albite and aegirine decreases, the primary zeolite changes from natrolite to analcime, and the pyroxene and schizolite shift towards the aegirine and serandite (Mn-rich) endmember compositions, respectively. These transitions can be related to progressive hydration and recrystallisation of the rock in response to hydrothermal alteration associated with deformation. Nundorite also contains a diverse suite of accessory rare metal phases such as zircon, monazite, cerite-group minerals, fergusonite, fersmite, natroniobite, galgenbergite, epidote–allanite and a range of Zr alkali silicate minerals. Samarium–Nd isotopic compositions of nundorite (εNd ∼+5.5 at 585 Ma) are comparable with mafic volcanic rocks of the surrounding Mount Arrowsmith Volcanics and are consistent with derivation from a mantle source. These data, together with the uniform peralkaline composition, depletion in Ti and P, and enrichment in incompatible elements, are consistent with an origin as highly fractionated phonolite. Phonolites of similar composition are rare but have been reported from continental rift and intraplate alkaline provinces worldwide. Nundorite, therefore is not just a geological oddity, but also provides reaffirmation of the continental rift setting for the Mount Arrowsmith Volcanics and highlights the critical mineral resource potential of the region, as extensive crystal fractionation is a key mechanism to produce ore grade levels of rare metals in alkaline magmatic systems.