Insoluble organic matter (IOM) and hydrothermally treated IOM extracted from two carbonaceous chondrites, Murchison and Allende, was studied using sulfur K‐edge XANES (X‐ray absorption near edge structure) and μ‐Raman spectroscopy, with the aim to understand their IOM's sulfur speciation and structural order, and how aqueous alteration or thermal metamorphism may have transformed these materials. We found that the sulfur‐functional group chemistry of both the Murchison IOM and hydrothermally treated IOM samples have a large chemical variability ranging from oxidation states of S−2 to S+6, and exhibit a transformation in their oxidation state after the hydrothermal treatment (HT) to produce thiophenes and thiol compounds. Sulfoxide and sulfite peaks are also present in Murchison. Sulfates considered intrinsic to Murchison are most likely preaccretionary in nature, and not a result of reactions with water at high temperatures on the asteroid parent body. We argue that the reduced sulfides may have formed in the CM parent body, while the thiophenes and thiol compounds are a result of the HT. Micro‐Raman spectra show the presence of aliphatic and aromatic moieties in Murchison's material as observed previously, which exhibits no change after HT. Because the Murchison IOM was modified, as seen by XANES analysis, absence of a change observed using micro‐Raman indicated that although the alkyl carbons of IOM were cleaved, the aromatic network was not largely modified after HT. By contrast, Allende IOM contains primarily disulfide and elemental sulfur, no organic sulfur, and shows no transformation after HT. This nontransformation of Allende IOM after HT would indicate that parent body alteration of sulfide to sulfate is not feasible up to temperatures of 300°C. The reduced sulfur products indicate extreme secondary chemical processing from the precursor compounds in its parent body at temperatures as high as 624°C, as estimated from μ‐Raman D band parameters. The Raman parameters in Allende IOM that was interpreted in terms of amorphous carbon with regions of large clusters of benzene rings, was transformed after the HT to those with fewer benzene rings.