The Bureau of Mines investigated processes for recovering a marketable lithium product from the montmorillonite-type clays of the McDermitt Caldera. The clay deposit, located on the Nevada- Oregon border, is estimated to contain over 3 million short tons of lithium. Limestone-gypsum roasting and selective chlorination proved most successful for extracting lithium from the clays; 80-pct li recovery was achieved using either technique. With both processes, lithium silicate in the clay was converted to a water- soluble compound--either lithium sulfate or lithium chloride. The lithium was then recovered as a carbonate by water leaching the calcine, concentrating the leach solution by evaporation, and precipitating the lithium with soda ash. The operating costs for the limestone-gypsum roast process were estimated at $2.02/Lb li2co3; selective chlorination operating costs were estimated at $3.85/Lb li2co3. The current selling price of li2co3 is about $1.50/Lb. A detailed flowsheet, material balance, and process evaluation are presented for the limestone-gypsum roast process. In addition, lithium reserves and resources are discussed and the McDermitt clays are described.