Oxygen fugacity (fO2) conditions were determined for 29 peridotite xenoliths from the A154-North and A154-South kimberlites of the Diavik diamond mine using the newly developed flank method modified specifically for measuring Fe3+ in mantle-derived pyropic garnets. The results indicate that the garnet-bearing lithospheric mantle beneath the central Slave craton is vertically layered with respect to oxidation state. The shallow (<140 km), "ultra-depleted" layer is the most oxidized section of garnet-bearing subcratonic mantle thus far measured, up to one log unit more oxidizing relative to the FMQ buffer [Δlog fO2 (FMQ) + 1]. The lower, more fertile layer has fO2 conditions that extend down to Δlog fO2 (FMQ) - 3.8, consistent with xenolith suites from other localities worldwide. Based on trace element concentrations in garnets, two distinct metasomatic events affected the mantle lithosphere at Diavik. An oxidized fluid imparted sinusoidal chondrite-normalized REE patterns on garnets throughout the entire depth range sampled. In contrast, a reducing melt metasomatic event affected only the lower portion of the lithospheric mantle. The fO2 state of the Diavik mantle sample suggests that diamond formation occurred by reduction of carbonate by fluids arising from beneath the lithosphere.