Formation of microtubes, defined as small internal borings, in fossil and modern bone is a well-attested phenomenon. However, determining whether microtubes were created by microbial activity or abiotic processes is challenging, particularly in fossils. Here, we report abundant microtubes in compact bone from numerous specimens of the marine reptile Keichousaurus from the Middle Triassic of southwestern China. Light and scanning electron microscope imaging of osteological thin sections, and CT-based 3D reconstruction of the microtubes, reveal geometric features typical of fungal hyphae, such as bifurcation and tight helical coiling. Some microtubes contain what may be the first known fossilized fungal vacuoles. The microtubes are thus likely to be of fungal origin, produced by saprobic marine fungi during decomposition. Furthermore, fluorine is abundant in the compact bone, and even more prevalent in the infillings that occur in many microtubes. The fungi evidently released calcium ions and took up fluorine from the reptiles’ bodies, and promoted the formation of fluorite in the microtubes. The infillings represent the earliest known instance of fungal-induced biomineralization within fossil bone, demonstrating that some Middle Triassic fungi were capable of impacting global biogeochemical cycling by taking up substantial amounts of fluorine.