Here, we present results from sediments collected in the Argentine Basin, a non-steady state depositional marine system characterized by abundant oxidized iron within methane-rich layers due to sediment reworking followed by rapid deposition. Our comprehensive inorganic data set shows that iron reduction in these sulfate and sulfide-depleted sediments is best explained by a microbially mediated process—implicating anaerobic oxidation of methane coupled to iron reduction (Fe-AOM) as the most likely major mechanism. Although important in many modern marine environments, iron-driven AOM may not consume similar amounts of methane compared with sulfate-dependent AOM. Nevertheless, it may have broad impact on the deep biosphere and dominate both iron and methane cycling in sulfate-lean marine settings. Fe-AOM might have been particularly relevant in the Archean ocean, >2.5 billion years ago, known for its production and accumulation of iron oxides (in iron formations) in a biosphere likely replete with methane but low in sulfate. Methane at that time was a critical greenhouse gas capable of sustaining a habitable climate under relatively low solar luminosity, and relationships to iron cycling may have impacted if not dominated methane loss from the biosphere.