[3][4][5] It forms from the reaction of clay minerals or aluminous rocks with solutions enriched in phosphate derived from bat or bird guano or, less commonly, from bones or other organic matter.

Taranakite forms small white, pale yellow, or gray crystals, which are typically found in pulverulent nodular aggregates, or crusts.

[8][9] The material had been found by H. Richmond on the Sugar Loaf Islands of Taranaki, New Zealand (in the vicinity of 39°02′57″S 174°01′40″E / 39.049086°S 174.027708°E / -39.049086; 174.027708), as thin yellowish-white amorphous seams in fissures within trachytic rocks.

Physical differences—its relative softness and ease of fusibility—led Skey, the colonial New Zealand Government analyst, to undertake quantitative chemical analysis which identified the mineral as a double hydrous phosphate of aluminia and potash, with some replacement of aluminium with ferric iron.

[11] Hector and Skey identified bird guano as the most likely source of the phosphate required to form taranakite, and speculated on possible advantages of its use in making superphosphate, owing to the absence of carbonate and relatively small amounts of aluminium.

In 1894, Armand Gautier described a mineral which he called minervite from caves at Grotte de Minerve in Hérault, France and argued that it formed from decomposing guano and animal remains reacting with clays.

In the tropics, rather than taranakite, the minerals that form from guano-derived phosphatization of igneous rocks are variscite (AlPO4·2H2O), metavariscite (AlPO4·H2O), barrandite ((Al,Fe3+)PO4·2H2O), strengite and phosphosiderite (Fe3+PO4·2H2O).

[2] Potassium-taranakite (synonymous with taranakite) or ammonium-taranakite (where the alkali cations are replaced by ammonium) may form in acidic soils treated with potassium or ammonium-containing phosphate-fertilizers.