Abstract: The Lanping-Simao Basin in western Yunnan is located in the southeast part of the Southern Tibet-Western Yunnan geothermal zone and the Qiangbei-Western Yunnan salt mineralization zone, where red strata widely occur. There are many hot springs, salty springs and saline springs in the basin, and some of the hot springs deposit travertines. This paper briefly introduces the lithology of the red layers and types of groundwater occurrence in the red beds, and describes the formation mechanism of the springs occurring in the red beds and the control factors for deposition of the travertines. The hydrochemical characteristic ratios of salty or saline springs for prediction of the prospect of potash ore are also briefly described. The distribution of groundwater in the red beds in the basin is controlled by lithology, tectonics and topography. The distribution of weathering fissure water is limited, and the interlayer fissure water and dissolution pore water are the main types. The hot springs are all of the deep-circulation type, while the salty and saline springs are mainly of the shallow-circulation type and undergo incongruent dissolution of the salt-bearing red beds. The chemical factors affecting the deposition of travertine near the hot springs mainly include pH, content of CO₂ or partial pressure of CO₂, and contents of Ca²⁺ and HCO₃^-. The values of equivalent ratio of Ca²⁺/HCO₃^- and saturation index of calcite can be used to predict the trend of travertine deposition. The ion ratios of the salty and saline springs are helpful in predicting the prospects of potash exploration.