The Panzhihua intrusion hosts a large Fe-Ti oxide deposit in the Permian Emeishan large igneous province (ELIP), SW China. The mechanism of such massive Fe-Ti oxide accumulation in the layered intrusion is still a matter of debate. In this study, we suggest that the ore formation occurred via density-driven liquid segregation of immiscible Fe-rich liquid, instead of simple mineral sorting of Fe-Ti oxides. Interstitial oxides and kinked plagioclase crystals reveal that the Fe-Ti oxides were crystallized in-situ after their surrounding silicate minerals. Dissolution texture of primocryst plagioclase is ubiquitous in the ores, indicating that the primocryst plagioclase grains were in disequilibrium with the surrounding melt. Fe-Ti oxide-rich globules (similar to 38 wt% FeO) are present in the ore-barren gabbro, and likely represent solidified pockets of the immiscible Fe-rich liquid. Olivine in the Fe-Ti oxide ores occurs as primocrysts (avg. Fo = 68.5) that crystalized before the interstitial Fe-Ti oxides, or as growth rims (avg. Fo = 77.5) that crystalized after interstitial Fe-Ti oxides. The primocryst olivine was likely in equilibrium with the Panzhihua parental magma, and its composition matches well with that of the basalt (Fe2O3T =-16 wt%) exposed near the intrusion. The olivine rim was likely in equilibrium with the residual melt produced from-33% crystallization of the Fe-Ti oxide-rich globule. This study confirms that the ore layers are formed by the sinking of dense immiscible Fe-rich liquid to squeeze out the original silicate melt in the crystal mush, forming the (semi-)massive Fe-Ti oxide layered ores.