Studies of ferruginous surface grains (FSGs) have shed considerable light on the origin of both these enigmatic grains and on regolith evolution. This paper describes a user-friendly classification scheme, and the genesis and evolution of FSGs. The classification system has four levels. The first is based on initial observations necessary to recognise the class of regolith material to which FSGs belong, namely lags. The second separates FSGs from other lag components, such as rock fragments and resistant mineral grains, and hence requires more detailed observation of the sampled material. The third level of classification requires petrographic and mineragraphic examination- the main textural types are homogeneous, lithorelic, pseudomorphic, vesicular, sandy, and oolitic. The fourth level of classification identifies modifying microfabrics, namely concentric, cutanic, compound, mottled, and syneresis fabrics. FSGs are formed in three main environments: the weathering profile (mottled zone and saprolite); surfical environments (soils and sediments); and subaqueous environments (lakes and rivers). They form by four main processes: ferruginisation of a protolith (mainly in the weathering profile, but also in subaerial and subaqueous sediments); concretion in a solid medium (surficial materials and the weathering profile); accretion in subaqueous environments, (lakes and rivers); and fragmentation of existing ferruginous material. Diagenesis of FSGs causes both textural and mineralogical changes. Dehydration, mineralogical unmixing, dissolution, and precipitation all alter the original fabric. Replacement, dehydration, and recrystallisation change the mineralogy. Hydration of hematite to goethite also occurs in humid climates. Ions of interest to exploration geochemists may be lost during syneresis and unmixing. Application of this classification system requires integration of microfabric studies with geomorphological mapping, regolith stratigraphy, mineralogy, and geochemical data.