Abstract: Major and rare earth element contents are reported for Late Archean banded iron formations (BIFs) in the Bababudan Group of the Dharwar Craton, South India. The BIFs are mostly composed of SiO2 (average1ρ = 54.88.1 wt%) and Fe2O3* (44.38.2 wt%). The Al2O3 and TiO2 contents are remarkably low, suggesting that detrital components were starved during the BIF deposition. The BIFs have a LREE‐enriched pattern with a relatively high (La/Yb)N (6.644.07). Total REE concentrations (RE) vary from 5.2 to 65.3 ppm. The REE patterns are characterized by the presence of a very large negative Ce anomaly (Ce/Ce*: 0.13‐0.83) and a positive Eu anomaly (Eu/Eu*: 0.96‐2.45). The Eu/Eu* decreases and (La/Yb)N increases with a increase of RE. These correlations of REE indices are similar to those of modern hydrothermal iron‐rich sediments near a mid‐ocean ridge (MOR). Greenstones associated with the BIFs have MORB‐like geochemical features. These geochemical and geological lines of evidence indicate that the depositional site of the BIFs was remote from a continent and/or island arc and that the BIFs were in situ hydrothermal sediments near a MOR. A striking negative Ce anomaly in the BIFs indicates that oxygenated deep‐sea environments emerged at 2.9‐2.7 Ga. The existence of contemporaneous Mn deposits in the Dharwar Craton supports this assertion. Our scenario of oxygen in the Earth's surface of the Late Archean is different from long‐held notion that the atmosphere and ocean were persistently anoxic throughout the Archean.