During the Integrated Ocean Drilling Program (IODP) Expedition 331, five sites were drilled into the Iheya North Knoll hydrothermal system in the Okinawa Trough (OT) — a back-arc basin characterized by thick terrigenous sediment. Following up on the previous study by Shao et al. (2015), we present new mineralogical, geochemical, and Sr-Nd isotope data to investigate the origin of the hydrothermal sediments and characterize the hydrothermal system. The substrate at the Iheya North Knoll is dominated by pumiceous sediment and other volcanoclastic materials interbedded with hemipelagic (terrigenous and biogenous) sediments. Impermeable layers separate the hydrothermal sediments into distinct units with depth that are characterized by various assemblages of alteration materials, including polymetallic sulfides, sulfates, chlorite- and kaolinite-rich sediments. The rare earth elements (REEs) and Nd isotope data suggest that the chlorite-rich and kaolinite-rich layers primarily resulted from the alteration of pumiceous materials in different chemical and physical conditions. Kaolinite-rich sediment likely reflects low pH and low Mg concentration fluids, while chlorite-rich sediment formed from fluids with high pH and increased Mg contents, likely at higher temperatures. The Sr isotopic compositions of subsurface anhydrite reflect high seawater/hydrothermal fluid ratios in the mid-OT hydrothermal area. Compared with chlorite-rich sediments from other sediment-covered or felsic-hosted hydrothermal systems, the chlorite-rich sediments in the mid-OT are characterized by lower concentrations of Al and Fe but much higher Y, Zr, Hf, Th and REEs, indicative of the distinct nature of the precursor rocks in this region.