The gem deposits of Sri Lanka are studied from the point of view of their geology, mineralogy and geochemistry. Nearly all the gem formations are located in the central high-grade metamorphic terrain of the Highland Complex. The gem deposits are classified as sedimentary, metamorphic and magmatic; the sedimentary types being the most abundant. The mineralogy of the gem deposits varies widely with, among others, corundum, chrysoberyl, beryl, spinel, topaz, zircon, tourmaline, garnet and sphene being common. Rare element concentrations in sediments from the three main gem fields of Sri Lanka, namely Ratnapura, Elahera and Walawe, were studied. It was found that some sediments are considerably enriched in certain elements compared to their average continental crustal abundances. The Walawe Ganga sediments show anomalous enrichments of the high field strength and associated elements, particularly Zr, Hf, W and Ti. This is attributed to the presence of accessory minerals such as zircon, monazite and rutile. Some of these heavy minerals comprise as much as 50 wt% of sediment. The geochemical enrichment of some trace elements compared to their average crustal abundances indicates that highly differentiated granites and associated pegmatites have provided the source materials for enrichment.