A mineralized Palaeoproterozoic volcanic sequence has been identified southwest of Vetlanda in southern Sweden. The sequence, which is defined as the Fröderyd Group, is surrounded by 1.78 Ga granitoids and may be considered as the southernmost segment of Svecofennian crust in Sweden. The Fröderyd Group has a bimodal geochemical character and is dominated by pillow basalts and associated gabbros but rhyolites, thin intercalations of marble and stratiform sulphide ores do also occur. The carbonate intercalations and the stratiform sulphide ores are interpreted as submarine exhalites formed syngenetically with the volcanic activity. The mafic rocks have a typical mid-ocean ridge basalt geochemistry with flat rare earth elements patterns. The lead isotopic compositions of the mafic rocks and the associated stratiform sulphide ores support such a close affinity to juvenile sources with mantle character. In contrast, the rhyolites display more evolved geochemical signatures and isotopic patterns and are interpreted to represent remelted products of slightly older sialic crust. A model for the formation of the Fröderyd Group is presented, suggesting rifting along a continental margin which may have occurred in the final stage of the Svecofennian crust-forming period.