The Ernest Henry and the Starra Cu-Au deposits are two major IOCG deposits in the Cloncurry District. Systematically collected SEM-based modal mineralogy combined with petrophysical datasets enable a consistent model for IOCG deposit formation in which hydrolytic alteration plays an essential role in high-grade Cu-Au mineralisation. Modal mineralogy, mineral replacement textures, and the deposit-scale distribution of key mineral assemblages indicate that hydrothermal alteration produced a mappable zonation within and around the ore bodies. Although the mineral zonations around the two deposits differ in size and style, they both resulted from a sequence of iron oxide-alkali-calcic alteration, shearing, brecciation, and previously unrecognized hydrolytic alteration, which was coincident with the location of high-grade Cu-Au mineralization. Hydrolytic alteration reactions increased the rock-porosity via fluid-rock interactions resulting in increased porosity-permeability, for example by the partial to near-complete replacement of magnetite by hematite according to: Fe3O4 + 2 H+ = Fe2O3 + Fe2+ + H2O with ∆V = -32 %. In contrast, hydrothermal replacement during iron oxide-alkali-calcic alteration visible at the breccia margins and in bounding shear zones reduced porosity and likely permeability. In both deposits, these and similar mineral replacements resulted in rims of alteration minerals sealing the zone of Cu-Au mineralization, which led to fluid-focusing and ultimately in the formation of high-grade Cu and Au ore bodies with characteristic internal zonation of Cu-bearing minerals. Aspects of the mineral and metal zonation observed at the Ernest Henry and the Starra deposits are also observed in other IOCG deposits including the Prominent Hill deposit in the Gawler Craton. This highlights the significance of hydrolytic alteration in IOCG deposit formation and the importance for mineral exploration to systematically recognize its effects on host rock mineralogy during evaluation of exploration drill targets.