Banded iron formations (BIFs) are enigmatic chemical sedimentary rocks that chronicle the geochemical and microbial cycling of iron and carbon in the Precambrian. However, the formation pathways of Fe carbonate, namely siderite, remain disputed. Here, we provide photomicrographs, Fe, C and O isotope of siderite, and organic C isotope of the whole rock from the ~ 2.52 Ga Dagushan BIF in the Anshan area, China, to discuss the origin of siderite. There are small magnetite grains that occur as inclusions within siderite, suggesting a diagenetic origin of the siderite. Moreover, the siderites have a wide range of iron isotope compositions (δ56FeSd) from −0.180‰ to +0.463‰, and a relatively negative C isotope composition (δ13CSd = −6.20‰ to −1.57‰). These results are compatible with the reduction of an Fe(III)-oxyhydroxide precursor to dissolved Fe(II) through microbial dissimilatory iron reduction (DIR) during early diagenesis. Partial reduction of the precursor and possible mixing with seawater Fe(II) could explain the presence of siderite with negative δ56Fe, while sustained reaction of residual Fe(III)-oxyhydroxide could have produced siderite with positive δ56Fe values. Bicarbonate derived from both DIR and seawater may have provided a C source for siderite formation. Our results suggest that microbial respiration played an important role in the formation of siderite in the late Archean Dagushan BIF.