Environments that are hostile to life are characterized by reduced microbial activity which results in poor soil- and plant-health, low biomass and biodiversity, and feeble ecosystem development. Whereas the functional biosphere may primarily be constrained by water activity (aw) the mechanism(s) by which this occurs have not been fully elucidated. Remarkably we found that, for diverse species of xerophilic fungi at aw values of ≤ 0.72, water activity per se did not limit cellular function. We provide evidence that chaotropic activity determined their biotic window, and obtained mycelial growth at water activities as low as 0.647 (below that recorded for any microbial species) by addition of compounds that reduced the net chaotropicity. Unexpectedly we found that some fungi grew optimally under chaotropic conditions, providing evidence for a previously uncharacterized class of extremophilic microbes. Further studies to elucidate the way in which solute activities interact to determine the limits of life may lead to enhanced biotechnological processes, and increased productivity of agricultural and natural ecosystems in arid and semiarid regions.