Carbonatite-associated rare-earth-element (REE) deposits are the most significant source of the world's REEs; however, their genesis remains unclear. Here, we present new Sr-Nd-Pb and C-O isotopic data for Cenozoic carbonatite-hosted giant REE deposits in southwest China. These REE deposits are located along the western margin of the Yangtze Craton that experienced Proterozoic lithospheric accretion, and controlled by Cenozoic strike-slip faults related to Indo-Asian continental collision. The Cenozoic carbonatites were emplaced as stocks or dykes with associated syenites, and tend to be extremely enriched in Ba, Sr, and REEs and have high (87)Sr/(86)Sr ratios (>0.7055). These carbonatites were likely formed by melting of the sub-continental lithospheric mantle (SCLM), which had been previously metasomatized by high-flux REE- and CO2-rich fluids derived from subducted marine sediments. The fertility of these carbonatites depends on the release of REEs from recycled marine sediments and on the intensity of metasomatic REE refertilization of the SCLM. We suggest that cratonic edges, particularly along ancient convergent margins, possess the optimal configuration for generating giant REE deposits; therefore, areas of metamorphic basement bounded or cut by translithospheric faults along cratonic edges have a high potential for such deposits.