The phosphorus composition of banded-iron formations (BIFs) has been used as a proxy for Precambrian seawater composition and the paleoeredox state of Earth's surface environment. However, it is unclear whether the phosphorus in BIFs originally entered the sediment as a sorbed component of the iron oxyhydroxide particles, or whether it was incorporated into the biomass of marine phytoplankton. We conducted high-resolution mineral analyses and report here the first detection of an Fe(III) acetate salt, as well as nanocrystals of apatite in association with magnetite, in the 2.48 Ga Dales Gorge Member of the Brockman Iron Formation (a BIF), Hamersley, Western Australia. The clusters of apatite are similar in size and morphology to biogenic apatite crystals resulting from biomass decay in Phanerozoic marine sediments, while the formation of an Fe(III) acetate salt and magnetite not only implies the original presence of biomass in the BIF sediments, but also that organic carbon likely served as an electron donor during bacterial Fe(III) reduction. This study is important because it suggests that phytoplankton may have played a key role in the transfer of phosphorus (and other trace elements) from the photic zone to the seafloor.