A newly discovered Naomugeng lithium mineralization area is located to the east of the Central Asian Orogenic Belt (CAOB). The lithium is hosted in the volcanic rocks of the Manketou’ebo Formation. The altered volcanic rocks mainly consist of quartz, orthoclase, chlorite, montmorillonite, calcite, and dolomite. Here, we present integrated studies of petrography, mineralogy, and geochemistry of the altered volcanic rocks (with an average Li2O content of 0.43 wt.%) collected from the drilling hole and trail trench to systematically investigate the occurrence of lithium, the mineralizing processes, and the metallogenic mechanisms. The secondary minerals of the core samples are montmorillonite, chlorite calcite, and dolomite, while the secondary minerals from the earth surface ones are montmorillonite, chlorite, and calcite. The mass change calculation and isocon analysis show that the rocks received MnO, P2O5, Co, Ni, Cu, and Li and lost Na2O, K2O, MgO, rare earth elements (REE), and Rb in the alteration process. However, other elements such as Fe, V, Co, and Ca of the core samples increased while those of the earth surface ones did not change by much. Hence, there are two zones of alterations, i.e., the montmorillonization-chloritization zone and the montmorillonization-chloritization-carbonatization zone. Lithium enrichment occurs in the zone where montmorillonization and chloritization occur. The lithium is probably enriched in altered minerals such as montmorillonite and chlorite in the forms of interlayered or adsorbed ions. The slightly negative to positive Eu anomalies of the rocks can be explained by the metasomatism of hydrothermal fluid that enriched Eu. We suggest that the Naomugeng deposit is a clay-type lithium deposit and formed under a caldera setting. The meteoric and hydrothermal fluids leach the lithium from the volcanic materials and then alter the host rocks (e.g., tuff or sediments) in the caldera basin, which forms the type of lithium clay deposit. This study analyzed the migration behavior of elements in the Naomugeng lithium deposit during a hydrothermal process, which shows that the mass balance calculation has good application in reflecting the mineralization process of clay type deposit. This study also reveals the great exploration potential of the Naomugeng deposit and has important significance for further prospecting of clay-type lithium deposits in central Inner Mongolia.