NWA 8785 is a remarkable EL3 chondrite with a high abundance (~34 vol%) of an Fe‐rich matrix. This is the highest matrix abundance known among enstatite chondrites (ECs) and more similar to the matrix abundances in some carbonaceous and Rumuruti chondrites. X‐ray diffraction and TEM data indicate that the fine‐grained portion of the NWA 8785 matrix consists of nanoscale magnetite mixed with a noncrystalline silicate material and submicron‐sized enstatite and plagioclase grains. This is the first report of magnetite nanoparticles in an EL3. The Si content of the metal (0.7 wt%), presence of ferroan alabandite, and its O isotopic composition indicate NWA 8785 is EL3‐related. Having more abundant matrix than in other ECs, and that the matrix is rich in magnetite nanoparticles, which are not present in any other EC, suggest classification as an EL3 anomalous. Although we cannot completely exclude any of the mechanisms or environments for formation of the magnetite, we find a secondary origin to be the most compelling. We suggest that the magnetite formed due to hydrothermal activity in the meteorite parent body. Although ECs are relatively dry and likely formed within the nebular snow line, ices may have drifted inward from just beyond the snow line to the region where the EL chondrites were accreting, or more likely the snow line migrated inward during the early evolution of the solar system. This may have resulted in the condensation of ices and provided an ice‐rich region for accretion of the EL3 parent body. Thus, the EL3 parent body may have had hydrothermal activity and if Earth formed near the EC accretion zone, similar bodies may have contributed to the Earth's water supply. NWA 8785 greatly extends the range of known characteristics of ECs and EC parent body processes.