Direct examination of microbial mats from Icelandic hot springs with transmission electron microscopy and energy-dispersive X-ray spectroscopy revealed a consortium of bacterial cells in varying stages of mineralization. Differences in observed mineralogy largely reflect differences in the chemistry of the hydrothermal waters. Silica-rich spheroids formed epicellularly on cell walls and surrounding sheaths and capsules of microorganisms and, in some cases, intracellularly when presumably the cell(s) had lysed. Commonly, these precipitates were observed coalescing to form a matrix of amorphous silica that completely encapsulated the cells and/or replaced their cytoplasmic material. However, in other cells, the precipitates were composed of amorphous granules made exclusively of iron and silica in approximately equal proportions. At one locality, the bacteria formed several epicellular iron minerals, ranging from iron-mineralized capsules to fine-grained spheroids of amorphous ferric hydroxide and acicular aggregates of goethite. The complete encrustation of bacterial cells by silica, iron, or a combination of both may greatly enhance their preservation potential, such that these mineralized microorganisms may conceivably represent future microfossils. Thus, we may be witnessing contemporaneous biomineralization processes that are similar to those of the geologic past, particularly with regard to the origin of some Precambrian banded iron formations.