Fossils randomly generate only in desert, swamp and mangrove swamp biomes. Each chunk has two attempts within Y-coordinates 0 to 320 or -63 to -8 underground to generate a fossil, each with a chance of 1⁄64. They have an equal chance to generate as any of the four variants of skull or four variants of spine.
Fossils first generate the pure-bone layer with a structure integrity of 0.9, meaning 10% of the bone blocks are removed and do not override original terrain blocks, leaving 90% bone blocks. Next, the ore layer generates with a structure integrity of 0.1, replacing 10% of the existing fossil with coal ore for fossils that generate above Y level 0, or deepslate diamond ore for fossils that generate below Y level -8. The locations of these ore blocks do not always correspond with the voids generated in the initial bone fossil, so the resulting combination of both generations usually result in an incomplete fossil structure composed of bone blocks and ores.
Because fossils are features instead of structures, they generate even when the "Generate Structures" option is turned off.[1]
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Naturally-generated fossils are composed of a mix of bone blocks and coal or diamond ores, as detailed above. They are made with NBT structure files and have files for each type of fossil located in the folder minecraft.jar/data/minecraft/structures/fossil.
[NBT List / JSON Array] overlay_structures: (Cannot be empty) A list of overlay structure templates to choose from. Has to have the same length as [NBT List / JSON Array] fossil_structures.
[String][NBT List / JSON Array][NBT Compound / JSON Object] fossil_processors: One processor list (an [String]ID, or a new [NBT List / JSON Array][NBT Compound / JSON Object] processor list definition) — The processor for fossil structure templates.
[String][NBT List / JSON Array][NBT Compound / JSON Object] overlay_processors: One processor list (an [String]ID, or a new [NBT List / JSON Array][NBT Compound / JSON Object] processor list definition) — The processor for overlay structure templates.
[Int] max_empty_corners_allowed: Integer between 0 and 7 — How many corners of the structure are allowed to be empty for it to generate. Prevents structures floating in the air.
The placement of 'fossil' structures is hardcoded to be roughly 5 to 30 blocks below the surface, and cannot be precisely specified.