Columbus crater in the Terra Sirenum region of the Martian southern highlands contains light‐toned layered deposits with interbedded sulfate and phyllosilicate minerals, a rare occurrence on Mars. Here we investigate in detail the morphology, thermophysical properties, mineralogy, and stratigraphy of these deposits; explore their regional context; and interpret the crater's aqueous history. Hydrated mineral‐bearing deposits occupy a discrete ring around the walls of Columbus crater and are also exposed beneath younger materials, possibly lava flows, on its floor. Widespread minerals identified in the crater include gypsum, polyhydrated and monohydrated Mg/Fe‐sulfates, and kaolinite; localized deposits consistent with montmorillonite, Fe/Mg‐phyllosilicates, jarosite, alunite, and crystalline ferric oxide or hydroxide are also detected. Thermal emission spectra suggest abundances of these minerals in the tens of percent range. Other craters in northwest Terra Sirenum also contain layered deposits and Al/Fe/Mg‐phyllosilicates, but sulfates have so far been found only in Columbus and Cross craters. The region's intercrater plains contain scattered exposures of Al‐phyllosilicates and one isolated mound with opaline silica, in addition to more common Fe/Mg‐phyllosilicates with chlorides. A Late Noachian age is estimated for the aqueous deposits in Columbus, coinciding with a period of inferred groundwater upwelling and evaporation, which (according to model results reported here) could have formed evaporites in Columbus and other craters in Terra Sirenum. Hypotheses for the origin of these deposits include groundwater cementation of crater‐filling sediments and/or direct precipitation from subaerial springs or in a deep (∼900 m) paleolake. Especially under the deep lake scenario, which we prefer, chemical gradients in Columbus crater may have created a habitable environment at this location on early Mars.