Organic-walled microfossils provide the best insights into the composition and evolution of the biosphere through the first 80 percent of Earth history. The mechanism of microfossil preservation affects the quality of biological information retained and informs understanding of early Earth palaeo-environments. We here show that 1 billion-year-old microfossils from the non-marine Torridon Group are remarkably preserved by a combination of clay minerals and phosphate, with clay minerals providing the highest fidelity of preservation. Fe-rich clay mostly occurs in narrow zones in contact with cellular material and is interpreted as an early microbially-mediated phase enclosing and replacing the most labile biological material. K-rich clay occurs within and exterior to cell envelopes, forming where the supply of Fe had been exhausted. Clay minerals inter-finger with calcium phosphate that co-precipitated with the clays in the sub-oxic zone of the lake sediments. This type of preservation was favoured in sulfate-poor environments where Fe-silicate precipitation could outcompete Fe-sulfide formation. This work shows that clay minerals can provide an exceptionally high fidelity of microfossil preservation and extends the known geological range of this fossilization style by almost 500.Ma. It also suggests that the best-preserved microfossils of this time may be found in low-sulfate environments.