The Mesoproterozoic Rossport Formation of Ontario, Canada is generally interpreted as having been deposited in an intracratonic basin, most probably a rift‐related lake. While the Rossport, overall, is dominated by sandstone and shale, the Middlebrun Bay Member, in the middle of the formation, is a carbonate unit. The Middlebrun Bay Member, in exposures on the Channel Islands and along the north Shore of Lake Superior, consists most commonly of cherty, dolomitic microbial laminites and low‐relief columnar to conical forms. In contrast to typical outcrops, the Middlebrun Bay Member on Copper Island expresses as a massive, coarsely crystalline limestone unit, devoid of stromatolites or microbial laminae. Several features suggest dissolution and replacement of a primary, soluble phase such as an evaporite mineral. The top of the unit is marked by evidence of dissolution and collapse, including large sandstone clasts let down from the overlying bed. At petrographic scale, the Copper Island Carbonate comprises millimetre‐scale anhedral spar with abundant stylolites and concentration of insoluble material at grain boundaries, indicating recrystallization from a previous phase. Geochemical data from Copper Island and from correlative stromatolitic carbonate on Channel Island and mainland Ontario are consistent with hypersaline conditions, with elevated concentrations of carbonate‐associated sulphate, V and Ba. Based on these data, the massive carbonate exposed on Copper Island is interpreted as a calcitized evaporite, probably deposited originally as gypsum, and replaced by calcite during diagenesis. These data support previous work suggesting that the Middlebrun Bay interval was deposited during a period of increased aridity and low clastic influx, and further suggest that this restricted, hypersaline lake precipitated both carbonate and gypsum, comparable to modern arid playa lakes.