Iron rich olivine is a relatively common constituent of acidic and alkaline igneous rocks such as volcanic obsidians, rhyolites, trachytes and phonolites and plutonic quartz syenites where it is associated with amphiboles. Its main occurrence is in ultramafic volcanic and plutonic rocks and less commonly in felsic plutonic rocks and rarely in granite. It also occurs in medium-grade thermally metamorphosed Iron-rich sediments and in impure carbonate rocks.
Fayalite is stable with quartz at low pressures, whereas more magnesian olivine is not. Iron stabilizes the olivine + quartz pair. The pressure and compositional dependence of the reaction can be used to calculate constraints on pressures at which assemblages of olivine + quartz formed.
Fayalite can also react with oxygen to produce magnetite + quartz: the three minerals together make up the "FMQ" oxygen buffer. The reaction is used to control the fugacity of oxygen in laboratory experiments. It can also be used to calculate the fugacity of oxygen recorded by mineral assemblages in metamorphic and igneous processes.
The name fayalite is derived from Faial (Fayal) Island in the Azores where it was first described in 1840.