During this period, the blue stones were rearranged at least three times. In their final setting, they formed an inner circle and horseshoe, duplicating the sarsen stones.

The circle originally consisted of about 60 stones, and few of them now remain. The horseshoe was made of blue stones shaped as square pillar or obelisk. Its focus was the Altar Stone, now fallen, which would probably have stood upright.

It seems as though this phase was left unfinished because some holes (known as the Y and Z holes) were prepared outside the circle but never used.