Calcareous tufa deposits have been discovered in the Chibitka River valley near Lake Cheybek-Kohl, at the junction of the Kurai and Teletsk-Kurai large active faults in the southeastern Gorny Altai, Russia, at an altitude of 1800–2000 m. Fossil tufa is composed of calcite and cements Holocene grey colluvium and glacial till deposited by the Late Glacial Chibitka Glacier. Current tufa precipitation has been observed from a low-flow spring with cold (10 °C) HCO3-SO4–Ca-Mg water, рН = 6.86. The stable isotope composition of spring water is − 5.8‰ VPDB δ13C of dissolved inorganic carbon and − 14.5‰ VSMOW δ18O. Modern tufa consists of thin laminated Mg-calcite and Sr-aragonite crusts, with abundant algae and biofilms on their surfaces. Both modern and fossil tufas are depleted in REE (a total of 0.40–16.4 ppm and 0.40–3.80 ppm, respectively) and share similar PAAS-normalised REE + Y spectra with HREE enrichment and slight progressive LREE depletion. The modern tufas show positive δ13C values of 0.1‰ to 0.9‰ VPDB while the fossil ones have an isotopically lighter composition of δ13C = − 4.1‰ to − 1.9‰ VPDB; the δ18O range is very narrow (− 13.0 to − 13.8‰ VPDB). Both stable isotope and trace-element signatures (including REE patterns) of the tufas indicate precipitation from cold groundwaters subjected to prolonged interaction with a carbonate aquifer (the Baratal Group of limestone and dolostone) in a cold continental climate similar to the present conditions. Tufa deposition in the Lake Cheybek-Kohl area began with the onset of post-Late Glacial global warming and permafrost degradation. Unlike the fossil tufa formation, current precipitation of freshwater carbonates has been microbially mediated. The discovered tufa deposits provide new palaeoclimatic and active tectonic proxies in the southeastern Gorny Altai.