Narrowband reflectance spectra of the saturnian satellites S VII Hyperion and S IX Phoebe were obtained across the 0.4-to 0.8-ยตm spectral region. The spectrum of Phoebe shows an absorption feature centered near 0.43 ยตm superimposed on the UV/blue intervalence charge transfer transition present in the spectrum, similar to absorptions identified in the spectra of C-class asteroids (Vilas et al. 1993b. Icarus 105, 67-78). We use a linear mixing model to separate the reflectance spectrum of the dark material on Hyperion from the icy material. A distinct absorption feature centered at 0.67 ยตm is present. A slight inflection suggesting an absorption feature near 0.4-0.6 ยตm, and change in slope near 0.73 ยตm suggesting the lower wavelength edge of an absorption, are also present. These absorptions are very similar to those identified in the spectrum of the dark material on the surface of Iapetus (Vilas et al. 1996. Icarus 124, 262-267), suggesting that the dark material on these two satellites is compositionally similar and has a similar origin. We attribute these absorption features to the 6 A 1 โ 4 T 2 (G) and 6 A 1 โ 4 T 1 (G) ferric charge transfer transitions in iron alteration minerals such as goethite and hematite that are products of the aqueous alteration of anhydrous silicates.