The genesis of hypozonal orogenic gold deposits is highly controversial, with both crustal metamorphic fluids and variously derived sub-crustal fluids suggested as fluid and metal sources. The Lower Jurassic Danba gold deposit, a rare Phanerozoic hypozonal orogenic gold deposit on the western margin of the Yangtze Craton, China, provides an opportunity to resolve these controversies. Danba is characterized by biotite–amphibole alteration and pyrrhotite-dominant ore assemblages formed at ~ 500–600 °C. The δ34S values of ore-related pyrrhotite range from + 3.1 to + 9.9‰, in sharp contrast to those of syn-sedimentary pyrrhotite from Devonian host rocks which are between − 6.8 and − 9.5‰. The Pb isotope compositions of ore-related pyrrhotite, with 206Pb/204Pb = 17.85–18.25 and 207Pb/204Pb = 15.48–15.67, are less radiogenic and more variable than those of unaltered host rocks. These differences, combined with the hypozonal feature of the deposit, indicate that ore metals and sulfur were derived from a sub-crustal, rather than a local crustal source. The PGE patterns of ore-related pyrrhotites are similar to those of sulfides in Baltic mantle lithosphere that was metasomatized by aqueous fluids in terms of marked enrichment of Pd and Ru but significantly differ from those of magmatic intrusions and related magmatic–hydrothermal deposits. This suggests that the metals that formed the Danba deposit were transported via aqueous fluid from metasomatized mantle lithosphere rather than from a magmatic source. The δ18O of mantle fluid calculated from hydrothermal quartz and biotite ranges from 10 to 12‰. The anomalously high S and O isotope ratios and variable Pb isotope ratios, together with PGE data, support a model in which the inferred mantle lithosphere source was significantly hydrated, metasomatized, and fertilized by fluid derived from subducted oceanic sediments with elevated δ34S and δ18O values. Geological evidence suggests that this subduction event was Neoproterozoic in age. This study defines a model in which hydrated and metasomatized mantle lithosphere was formed during early subduction, but it was over 500 million years later, during later Lower Jurassic asthenosphere upwelling, that metal- and sulfur-rich fluid was released into the crust to form the Danba gold deposit.