Revealing the geological history of microbial life is very challenging. Microbes rarely are preserved with morphological fidelity, and even when they are, morphology is a poor guide to phylogeny and metabolism. Biological studies of environments considered analogous to those of paleobiological interest on the ancient Earth can inform interpretations and suggest new approaches. This paper reviews recent advances in our understanding of the biological diversity of two environments relevant to Archean paleobiology: those of extreme acidity and temperature (the Mt. Hood and White Island volcanoes), and high salinity (living stromatolites in Shark Bay). The combination of traditional microbial isolation with the use of modern molecular techniques has revealed that the microbial communities in these environments are much more diverse than originally thought. Through the extraction of whole microbial community DNA, enzymatic amplification of evolutionarily conserved genes, and cloning and sequencing of these genes, more specific and informed inferences concerning functional complexity in these extreme environments have now been made. Studies of the modern stromatolites have demonstrated that they have a very diverse range of micoorganisms, and contrary to previous interpretations, cyanobacteria are not the most abundant microbes present. In addition, many of the microorganisms are unique with no known close relatives, and these microorganisms may also possess novel physiologies vital to the integrity and persistence of stromatolites through space and time. Microbes in the volcanoes studied are present ubiquitously and include geochemically significant sulfur- and iron-cycling taxa. The findings from the studies reviewed here suggest that the Archean biota may have been functionally diverse and much more complex than has yet been revealed. The importance of studying modern analogues is stressed in that the biogeochemical processes occurring in these communities leave morphological, mineralogical, lipid and isotopic signals that could be sought in the rock record.