In well‐buffered modern soils, higher annual rainfall is associated with enhanced soil ferrimagnetic mineral content, especially of ultrafine particles that result in distinctive rock magnetic properties. Hence, paleosol magnetism has been widely used as a paleoprecipitation proxy. Identifying the dominant mechanism(s) of magnetic enhancement in a given sample is critical for reliable inference of paleoprecipitation. Here, we use high‐resolution magnetic field and electron microscopy to identify the grain‐scale setting and formation pathway of magnetic enhancement in two modern soils developed in higher (∼580 mm/y) and lower (∼190 mm/y) precipitation settings from the Qilianshan Range, China. We found that both soils contain 1–30 μm aeolian Fe‐oxide grains with indistinguishable rock magnetic properties, while the higher‐precipitation soil contains an additional population of ultrafine (