All known forms of life require phosphorus, and biological processes strongly influence the global phosphorus cycle. Although the record of life on Earth extends back to 3.8billion years ago and the advent of biological phosphate processing can be tracked to at least 3.5billion years ago, the earliest known P-rich deposits appeared only 2billion years ago. The onset of P deposition has been attributed to the rise of atmospheric oxygen 2.4-2.3billion years ago and the related profound biogeochemical shifts, which increased the riverine input of phosphate to the ocean and boosted biological productivity and phosphogenesis. However, the P-rich deposits post-date the rise of oxygen by about 300million years. Here we use microfabric, trace element and carbon isotope analyses to assess the environmental setting and redox conditions of the 2-billion-year-old P-rich deposits of the vent- or seep-influenced Zaonega Formation, northwest Russia. We identify phosphatized microorganism fossils that resemble modern methanotrophic archaea and sulphur-oxidizing bacteria, analogous to organisms found in modern seep settings and upwelling zones with a sharp redoxcline. We therefore propose that the P-rich deposits in the Zaonega Formation were formed by phosphogenesis mediated by sulphur bacteria, similar to modern sites, and by the precipitation of calcium phosphate minerals on microbial templates during early diagenesis.