Environmental niches in which life first emerged and later evolved on the Earth have undergone dramatic changes in response to evolving tectonic/geochemical cycles and to biologic interventions, as well as increases in the Sun's luminosity of about 25 to 30 per cent over the Earth's history. It has been inferred that the greenhouse effect of atmospheric CO2 and/or CH4 compensated for the lower solar luminosity and dictated an Archaean climate in which liquid water was stable in the hydrosphere. Here we demonstrate, however, that the mineralogy of Archaean sediments, particularly the ubiquitous presence of mixed-valence Fe(II-III) oxides (magnetite) in banded iron formations is inconsistent with such high concentrations of greenhouse gases and the metabolic constraints of extant methanogens. Prompted by this, and the absence of geologic evidence for very high greenhouse-gas concentrations, we hypothesize that a lower albedo on the Earth, owing to considerably less continental area and to the lack of biologically induced cloud condensation nuclei, made an important contribution to moderating surface temperature in the Archaean eon. Our model calculations suggest that the lower albedo of the early Earth provided environmental conditions above the freezing point of water, thus alleviating the need for extreme greenhouse-gas concentrations to satisfy the faint early Sun paradox.