Marine and lacustrine sediments represent an important source of global paleomagnetic data. Although it is usually assumed that detrital iron oxides record most of the magnetic signal in sediments, iron sulfides—which form during bacterial sulfate reduction—can also represent a significant source of sedimentary magnetism. Knowing how sulfate reduction impacts sedimentary magnetism is critical to the interpretation of paleomagnetic records. Here, we show that three distinct types of magnetic particles can be produced by bacterial sulfate reduction, each of which impacts the bulk sediment magnetism in a distinct way. We combined magnetic force microscopy and electron probe microanalysis to image magnetic mineral extracts from Dead Sea sediments from a glacial period and an interglacial period. In sediments from the dry interglacial period, during which bacterial sulfate reduction was suppressed, we found greigite framboids (Fe3S4) with strong intergrain magnetic interactions. Contrastingly, in sediments from the wet glacial period, which experienced extensive sulfate reduction, pyrite (FeS2) is the dominant sulfide phase. High-resolution magnetic imaging of glacial pyrite reveals that greigite is present as single-domain particles within the pyrite. We also found that as titanomagnetite grains undergo bacterially mediated alteration to form pyrite, the original magnetic grains become divided into smaller regions, which potentially facilitates acquisition of secondary magnetization by the reorganization of these magnetic domains. Our results provide a previously undocumented mechanism by which bacterially mediated alteration can overwrite primary detrital magnetic records.