The findings, from the American space agency Nasa, indicate that Mars may once have been teeming with bugs which lived at the bottom of shallow pools and lakes.
They also suggest there would have been plants or organisms capable of photosynthesis and complex ecosystems on Mars.
However British experts said the evidence, though exciting, had to be treated with caution and could not be taken as conclusive.
The work was carried out by a team led by Nasa scientist Dr Imre Friedmann that has been studying the 4.5 billion-year-old meteorite ALH84001.
Scientists think the potato-sized rock, found in Antarctica's Allan Hills ice field in 1984, was blasted off the surface of Mars by a comet or asteroid 15 million years ago.
After drifting through space it was caught by the Earth's gravity and landed in Antarctica, where it lay for 13,000 years.
In 1996 Nasa rocked the scientific world by announcing the discovery of worm-like "microfossils" left by Martian bacteria within the meteorite.
Since then other experts have argued that non-biological chemical processes could explain what was found.
The controversy has rumbled on, however - and today took a dramatic new twist. Dr Friedmann insists his team has found clinching evidence that should silence the doubters.
Inside a small fragment of the meteorite, he says, they detected chains of magnetic iron crystals which could only have been left by living organisms.
Similar magnetite crystal chains are seen in Earthly bugs called magnetotactic bacteria, which live near the surface of shallow water sediments.
The bugs use the tiny magnets inside their bodies as compasses to guide them to sources of oxygen, which they need to live.
Magnetite crystals have been found in the meteorite before, but until now no clear images of the chain formations synonymous with bacteria have been seen. Dr Friedmann discovered hints of such chains three years ago, but the evidence then was unconvincing.
The new findings were made possible by a sophisticated electron microscopy technique not available before.
It produced 3D images showing nearly 1,000 magnetite chains of varying lengths within the small chip analysed, suggesting that the original rock contained millions.
Dr Friedmann, from Nasa's Ames Research Centre in Moffat Field, California, and Florida State University, Tallahassee, said: "These crystals match all the criteria for biologically-formed chains, and as far as I'm concerned it's conclusive evidence that Martian bacteria were in this meteorite.
"I cannot guess how my colleagues will react, but in my opinion no reasonable person can doubt it any more. The evidence is so strong. When you put all the elements together there can be no other explanation."
He stressed there was no chance of the crystals being left by contaminating Earth bacteria. They were embedded in carbonate, which in turn was encased in glass formed when the meteorite was blown of the surface of Mars.
Bugs of this sort lived in an environment very different from that of Antarctica, he added.
Dr Friedmann, whose research is reported today in the journal Proceedings of the National Academy of Sciences, said: "There are certain conclusion you can draw, which are very significant.
"The chances of finding traces of so many bacteria in a two kilogram rock from another planet are quite slim. It means bacteria must have been very widespread on Mars."
He argued that since magnetotactic bacteria require oxygen, there must have been some kind of photosynthesising life on Mars. The Earth owes its oxygen to the photosynthesis of plants and algae.
One mystery was how the bugs got into the rock, since magnetotactic bacteria are free swimming and do not live inside rocks.
However, they might have died and been washed into cracks in the rock while it was still on the Martian surface, suggest the researchers.
Other scientists may need more convincing, however.
Dr John Bridges, a planetary scientist at the Natural History Museum who has studied Martian meteorites, said: "This is an interesting contribution to the research on this very important rock, but I don't see it as definitive evidence of life on Mars.
"You can't ignore the possibility of contamination. When we get down to such incredibly small scales it gets really difficult to distinguish between terrestrial overprint and original Martian minerology."
Dr Mark Sim, from Leicester University, project director of the British-led Beagle II mission which will land a life-seeking probe on Mars in 2003, said: "It's exciting, interesting work, there's no doubt about it, and it appears to indicate that the crystals are of possibly biological origin.
"But there are some problems. There's an old saying that if you make extraordinary claims you need extraordinary proof."