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The occurrence of microbially induced smectite-to-illite (S-I) reaction has challenged both the notions of solely inorganic chemical control for this reaction and the conventional concept of a semiquantitative illite geothermometer for the reconstruction of the thermal and tectonic histories of sedimentary basins. Here, we present evidence for a naturally occurring microbially induced S-I transition, via biotic reduction of phyllosilicate structural Fe(III), in mudstones buried at the Nankai Trough, offshore Japan (International Ocean Discovery Program Site C0023). Biotic S-I reaction is a consequence of a bacterial survival and growth strategy at diagenetic temperatures up to 80 °C within the Nankai Trough mudstones. These results have considerable implications for petroleum exploration, modification of fault behavior, and the understanding of microbial communities in the deep biosphere.