Ancient iron formations hold important records of environmental conditions during the Precambrian eons. Reconstructions of past oceanic systems require investigation of modern ferruginous analogs to disentangle water column and diagenetic signals recorded in iron-bearing minerals. We analyzed oxygen, iron, and carbon isotopes in siderite, a ferrous carbonate phase commonly used as an environmental proxy, from a 100-m-long record spanning a 1 Ma depositional history in ferruginous Lake Towuti, Indonesia. Combining bulk sediment and pore water geochemistry, we traced processes controlling siderite isotope signatures. We show that siderite oxygen isotope compositions (δ18O) reflect in-lake hydrological and depositional conditions. Low iron isotope values (δ56Fe) record water column oxygenation events over geological timescales, with minor diagenetic partitioning of Fe isotopes by microbial iron reduction after deposition. The carbon isotope compositions (δ13C) reflect the incorporation of biogenic HCO3–, which is consistent with sediment organic matter remineralization lasting over ca. 200 ka after burial. Positive δ13C excursions indicate an increased production of biogenic methane that escaped the sediment during low lake levels. Diffusion across the sediment–water interface during initial formation of siderites tends to align the isotope signatures of bottom waters to those of pore waters. As microbial reduction of ferric iron and oxidation of organic matter proceed and saturate pore water conditions with respect to siderite, overgrowth on nuclei partially mutes the environmental signal inherited from past bottom waters over ca. 1 Ma. Because high depositional fluxes of ferric iron and organic matter in early oceans would have promoted similar microbial processes in ferruginous deposits prior to lithification, the environmental record contained in siderite grains can successively integrate depositional and early diagenetic signals over short geological timescales.