Microbial mats are complex organosedimentary structures1,2 organized as multilayered carpets of bacteria and archaea3,4. Within the microbial mat microenvironment, the occurrence of different metabolic processes can lead to alterations in local chemistry and induce carbonate precipitation5,6. The accretion of precipitated carbonate in lithifying microbial mats may induce microbialite formation1. Microbialite formation process are poorly understood but studies have suggested that taxonomic composition of lithifying microbial mats and their predominant metabolic pathways likely contribute7,8,9,10. In contrast to lithifying mats that potentially form microbialites, non-lithifying mats, that do not form microbialites, sporadically trap carbonate sand grains that are then actively bound to the microbial mat through the production of extracellular polymeric substances11,12,13. Both mat types are restricted in their occurrence to a few extreme environments, such as hypersaline lakes and geothermal springs14,15. Rottnest Island, located 18km off the coast of Perth (Western Australia) is home to both lithifying and non-lithifying mats; in contrast to other global locations these mats are poorly characterized. The aim of this study was to assess, via metagenome analysis, taxonomic diversity and functional capacity of lithifying (characterized as flocculent, blister, pustular) and non-lithifying (characterized as loosely cohesive and cohesive) microbial mats from 5 hypersaline lakes on Rottnest Island. Principal coordinate analysis revealed dissimilarities between mat types which accounted for 53% of taxonomic and 40% of functional variation (PERMANOVA, p=0.001). Proteobacteria were the dominant phylum across all mats (52% - lithifying mats; 41% - non-lithifying mats). Bacteroidetes were more abundant in lithifying mats, whereas Cyanobacteria and Euryarchaeota were more abundant in non-lithifying mats. Rhodothermaceae and Rhodobacteraceae, known for their role in sulfur cycling and thus in microbialite formation, were identified as dominant families only in lithifying mats. Functional analysis identified numerous genes associated with sulfur reduction, photosynthesis and carbon cycling mechanisms; all known to increase the alkalinity of the surrounding microenvironment, thus promoting carbonate precipitation. Our results not only unravel significant information about the microbial mats at Rottnest Island; but also contribute to targeting the taxonomic groups and metabolic pathways involved in the process of microbialite formation.