We report the discovery of exceptionally large biogenic magnetite crystals in clay-rich sediments spanning the Paleocene-Eocene Thermal Maximum (PETM) in a borehole at Ancora, NJ. Aside from previously described abundant bacterial magnetofossils, electron microscopy reveals novel spearhead-like and spindle-like magnetite up to 4 microm long and hexaoctahedral prisms up to 1.4 microm long. Similar to magnetite produced by magnetotactic bacteria, these single-crystal particles exhibit chemical composition, lattice perfection, and oxygen isotopes consistent with an aquatic origin. Electron holography indicates single-domain magnetization despite their large crystal size. We suggest that the development of a thick suboxic zone with high iron bioavailability--a product of dramatic changes in weathering and sedimentation patterns driven by severe global warming--drove diversification of magnetite-forming organisms, likely including eukaryotes.