The dwarf planet (1) Ceres, the largest object in the main asteroid belt with a mean diameter of about 950 kilometres, is located at a mean distance from the Sun of about 2.8 astronomical units (one astronomical unit is the Earth-Sun distance). Thermal evolution models suggest that it is a differentiated body with potential geological activity. Unlike on the icy satellites of Jupiter and Saturn, where tidal forces are responsible for spewing briny water into space, no tidal forces are acting on Ceres. In the absence of such forces, most objects in the main asteroid belt are expected to be geologically inert. The recent discovery of water vapour absorption near Ceres and previous detection of bound water and OH near and on Ceres (refs 5-7) have raised interest in the possible presence of surface ice. Here we report the presence of localized bright areas on Ceres from an orbiting imager. These unusual areas are consistent with hydrated magnesium sulfates mixed with dark background material, although other compositions are possible. Of particular interest is a bright pit on the floor of crater Occator that exhibits probable sublimation of water ice, producing haze clouds inside the crater that appear and disappear with a diurnal rhythm. Slow-moving condensed-ice or dust particles may explain this haze. We conclude that Ceres must have accreted material from beyond the 'snow line', which is the distance from the Sun at which water molecules condense.