The discovery of archaeal lineages is critical to our understanding of the universal tree of life and evolutionary history of the Earth. Geochemically diverse thermal environments in Yellowstone National Park provide unprecedented opportunities for studying archaea in habitats that may represent analogues of early Earth. Here, we report the discovery and characterization of a phylum-level archaeal lineage proposed and herein referred to as the ‘Marsarchaeota’, after the red planet. The Marsarchaeota contains at least two major subgroups prevalent in acidic, microaerobic geothermal Fe(III) oxide microbial mats across a temperature range from ~50-80 degrees C. Metagenomics, single-cell sequencing, enrichment culturing and in situ transcriptional analyses reveal their biogeochemical role as facultative aerobic chemoorganotrophs that may also mediate the reduction of Fe(III). Phylogenomic analyses of replicate assemblies corresponding to two groups of Marsarchaeota indicate that they branch between the Crenarchaeota and all other major archaeal lineages. Transcriptomic analyses of several Fe(III) oxide mat communities reveal that these organisms were actively transcribing two different terminal oxidase complexes in situ and genes comprising an F420-dependent butanal catabolism. The broad distribution of Marsarchaeota in geothermal, microaerobic Fe(III) oxide mats suggests that similar habitat types probably played an important role in the evolution of archaea.