With annual precipitation less than 20 mm and extreme UV intensity, the Atacama Desert in northern Chile has long been utilized as an analogue for recent Mars. In these hyperarid environments, water and biomass are extremely limited, and thus, it becomes difficult to generate a full picture of biogeochemical phosphate‐water dynamics. To address this problem, we sampled soils from five Atacama study sites and conducted three main analyses—stable oxygen isotopes in phosphate, enzyme pathway predictions, and cell culture experiments. We found that high sedimentation rates decrease the relative size of the organic phosphorus pool, which appears to hinder extremophiles. Phosphoenzyme and pathway prediction analyses imply that inorganic pyrophosphatase is the most likely catalytic agent to cycle P in these environments, and this process will rapidly overtake other P utilization strategies. In these soils, the biogenic δ¹⁸O signatures of the soil phosphate (δ¹⁸O_PO4) can slowly overprint lithogenic δ¹⁸O_PO4 values over a timescale of tens to hundreds of millions of years when annual precipitation is more than 10 mm. The δ¹⁸O_PO4 of calcium‐bound phosphate minerals seems to preserve the δ¹⁸O signature of the water used for biogeochemical P cycling, pointing toward sporadic rainfall and gypsum hydration water as key moisture sources. Where precipitation is less than 2 mm, biological cycling is restricted and bedrock δ¹⁸O_PO4 values are preserved. This study demonstrates the utility of δ¹⁸O_PO4 values as indicative of biogeochemical cycling and hydrodynamics in an extremely dry Mars‐analogue environment.