More than 1 billion tons of bauxite was formed on the karstic surface of the Permian Maokou Formation limestone in the western Guangxi area of Youjiang Basin (YB). However, its formation mechanism is still a matter of debate. In this study, the Taiping bauxite deposit, a representative large deposit in this area, was selected to carry out detailed mineral microanalysis and pyrite sulfur isotope analysis to further understand the metallogenic process of bauxite in this region. Taiping bauxite contains two layers: the lower bauxite layer and the upper claystone layer. Bauxite ore was mainly composed of diaspore, pyrite, anatase, kaolinite, minor pyrophyllite, parisite, and bastnäsite. Small amounts of detrital moissanite, native boron, and zircon were also found in the ore. The claystone was dominated by kaolinite, diaspore, pyrite, and chlorite. The occurrence of detrital zircon, moissanite, and native boron suggests that they were most likely derived from volcanic ash or lava, further confirming the contribution of volcanoes. The mineral assemblages of diaspore, pyrite, anatase, parisite, and bastnäsite in the bauxite ore indicate alkaline and reducing depositional environments. The extensive development of ovoid microorganisms and the significant negative δ34S values of pyrite (−42.80 ‰ to −12.54 ‰) indicate that microorganisms were involved in the formation of bauxite. This view was further confirmed by the wide development of fine pyrite (∼1 μm) cemented by cryptocrystalline diaspore in the ore. Extensive volcanism promotes the weathering of parent rocks, releasing Al3+, Fe3+, Ti4+, and REE3+ ions into the weathering system. Under strongly acidic and oxidizing conditions in the upper part of the weathering profile, these ions can migrate downward until they reach an alkaline and reducing environment on the carbonate surface. A large amount of diaspore, pyrite, anatase, parisite, and bastnäsite was formed near the karstic surface with the participation of microorganisms. Epigenetic modifications were also evident in the widespread development of kaolinite and pyrophyllite formed by the silicification of diaspore.