Various iron formation (IFs) document the interplay between the geosphere and the early biosphere during their co‐evolution. At the transition between the Paleo‐ and Mesoproterozoic eras, the oxidation of the atmosphere and ocean resulted in the waning of the typical marine deposited banded IFs. Here, we report the ∼1.7 Ga Yunmengshan IF at the southern margin of the North China Craton deposited in the intertidal to upper subtidal zone belonging to river delta of coastal environments. The combined REE + Y patterns and negative δ56Fe with positive δ53Cr values reveal terrestrial precipitation of iron oxide and an enhanced continental oxidative weathering at the end of Paleoproterozoic era due to increased atmospheric oxygen level. The oxygen level happened to have facilitated the early prosperity of microaerophilic Fe(II)‐oxidation bacteria on Earth's terrestrial surface, which is recorded by the coastal shallow water iron deposits globally characterized by their small scale and subaerial features.