Evidence suggests that life first evolved around 3.5 billion years ago. This evidence takes the form of microfossils (fossils too small to be seen without the aid of a microscope) and ancient rock structures in South Africa and Australia called stromatolites. Stromatolites are produced by microbes (mainly photosynthesizing cyanobacteria) that form thin microbial films which trap mud; over time, layers of these mud/microbe mats can build up into a layered rock structure — the stromatolite.
Stromatolites are still produced by microbes today. These modern stromatolites are remarkably similar to the ancient stromatolites which provide evidence of some of the earliest life on Earth. Modern and ancient stromatolites have similar shapes and, when seen in cross section, both show the same fine layering produced by thin bacterial sheets. Microfossils of ancient cyanobacteria can sometimes be identified within these layers.
Check out Knowing a fossil when you see one to learn how scientists figure out whether a squiggle in a rock is an important microfossil or just a squiggle in a rock.