To search more efficiently for a record of past life on Mars, it is critical to know where to look and thus maximize the likelihood of success. Large-scale site selection for the Mars 2020 mission has been completed, but small (meter to 10 cm)-scale relationships of microenvironments will not be known until the rover reaches the surface. Over a 2 m transect at a modern volcanic deposit on the flank of Askja volcano in the barren highlands of Iceland, we compared two biological indicators (ATP activity and 16SrRNA amplicon sequence composition) to physical characteristics including bulk chemical composition, spectral signatures of mineralogy, and grain size. Using analytical instrumentation analogous to those available on Mars rovers, we were able to characterize the geological setting of the deposits and link physical parameters to microbial abundance and diversity. In general, methanogenesis, methanotrophy/methylotrophy, and nitrate reduction were the functional traits most associated with microbial community shift along the transect. Core microbiome members tended to be associated with nitrate reduction, and relative abundance of core microbes was strongly related to free water in the deposit. Community compositional shift of the rare microbiome was related to microenvironmental changes such as change in grain size, geochemistry, and age of deposit. These correlations lead us to suggest a sampling strategy that accounts for Martian geology, looking for undisturbed (not remobilized) explosive volcanic ash below pumice that could maximize diversity and abundance of different bioindicators. Our study also illustrates the importance of studying the variability across microenvironments in low biomass settings on earth.