Previous workers identified a magnetically anomalous clay layer deposited on the northern United States Atlantic Coastal Plain during the Paleocene-Eocene thermal maximum (PETM). The finding inspired the highly controversial hypothesis that a cometary impact triggered the PETM. Here we present ferromagnetic resonance (FMR), isothermal and anhysteretic remanent magnetization, first-order reversal curve, and transmission electron microscopy analyses of late Paleocene and early Eocene sediments in drill core from Ancora, New Jersey. A novel paleogeographic analysis applying a recent paleomagnetic pole from the Faeroe Islands indicates that New Jersey during the initial Eocene had a ∼6°–9° lower paleolatitude (∼27.3° for Ancora) and a more zonal shoreline trace than in conventional reconstructions. Our investigations of the PETM clay from Ancora reveal abundant magnetite nanoparticles bearing signature traits of crystals produced by magnetotactic bacteria. This result, the first identification of ancient biogenic magnetite using FMR, argues that the anomalous magnetic properties of the PETM sediments are not produced by an impact. They instead reflect environmental changes along the eastern margin of North America during the PETM that led to enhanced production and/or preservation of magnetofossils.