Context : Clusters of galaxies represent important laboratories for studying galaxy evolution and formation . Well established and relaxed clusters are known below z < 1.4 , as well as , clusters in formation found close to radio galaxies at z > 2 , but the in-between redshift range , during which clusters are expected to undergo significant changes , is almost unexplored . Aims : By studying a galaxy overdensity in redshift and angular distribution at z = 1.6 , uncovered in the Galaxy Mass Assembly ultra-deep Spectroscopic Survey ( GMASS ) , we provide insight into the evolution of cluster galaxies at high redshift . Methods : We present a study of the significance of the galaxy overdensity at z = 1.6 , Cl 0332-2742 , its velocity dispersion , and X-ray emission . We reveal colour bimodality for cluster members and compare the properties of members of Cl 0332-2742 with galaxies outside the overdensity . Results : From the redshifts of the 42 overdensity members , we find a velocity dispersion of 500 km s ^ { -1 } . We conservatively estimate the overdensity in redshift space for the spike at z = 1.6 in the GMASS to be 8.3 \pm 1.5 . A map of the surface density of galaxies at z = 1.6 in the GMASS field shows that its structure is irregular with several filaments and local overdensities . The differences in the physical properties of Cl 0332-2742 member and field galaxies agree with the latest hierarchical galaxy formation models : for overdensity members , the star formation rate ( SFR ) , and specific SFR , is approximately 50 % lower than for the field galaxies ; overdensity galaxies are twice the age , on average , of field galaxies ; and there is a higher proportion of both massive ( M > 10 ^ { 10.7 } M _ { \odot } ) , and early–type galaxies , inside Cl 0332-2742 than in the field . Among the 42 members , seven have spectra consistent with being passively evolving , massive galaxies . These are all located within an area where the number density of z = 1.6 galaxies is highest . In a z - J colour-magnitude diagram , the photometric data of these early-type galaxies are in close agreement with a theoretical red sequence of a galaxy cluster at redshift z = 1.6 , which formed most of its stars in a short burst of star formation at z \sim 3 . Conclusions : We conclude that the redshift spike at z = 1.6 in the GMASS field represents a sheet–like structure in the cosmic web and the area with the highest surface density within this structure , containing already seven passively evolving galaxies , will evolve into a cluster of galaxies at a later time .