Otolith chemistry has gained increasing attention as a tool for analyzing various aspects of fish biology, such as stock dynamics, migration patterns, hypoxia and pollution exposure, and connectivity between habitats. While these studies often assume otolith elemental concentrations reflect environmental conditions, physiological processes are increasingly recognized as a modulating and/or controlling factor. In particular, biomineralization—the complex, enzyme-regulated construction of CaCO3 crystals scaffolded by proteins—is believed to play a critical role in governing otolith chemical patterns. This review aims to summarize the knowledge on otolith composition and biophysical drivers of biomineralization, present hypotheses on how biomineralization should affect element incorporation, and test the validity thereof with selected case studies. Tracers of environmental history are assumed to be dominated by elements that substitute for Ca during crystal growth or that occur randomly trapped within the crystal lattice. Strontium (Sr) and barium (Ba) largely comply with the biomineralization-based hypotheses that otolith element patterns reflect environmental concentrations, without additional effects of salinity, but can be influenced by physiological processes, typically exhibiting decreasing incorporation with increasing growth. Conversely, tracers of physiology are assumed to be elements under physiological control and primarily occur protein-bound in the otolith’s organic matrix. Physiological tracers are hypothesized to reflect feeding rate and/or growth, decrease with fish age, and exhibit minimal influence of environmental concentration. The candidate elements phosphorus (P), copper (Cu) and zinc (Zn) confirm these hypotheses. Magnesium (Mg) is believed to be randomly trapped in the crystal structure and hence a candidate for environmental reconstruction, but the response to all examined drivers suggest Mg to be coupled to growth. Manganese (Mn) substitutes for Ca, but is also a co-factor in matrix proteins, and therefore exhibits otolith patterns reflecting both environmental (concentration and salinity) and physiological (ontogeny and growth) histories. A consistent temperature response was not evident across studies for either environmental or physiological tracers, presumably attributable to variable relationships between temperature and fish behavior and physiology (e.g., feeding rate, reproduction). Biomineralization thus has a controlling effect on otolith element concentrations for elements that are linked with somatic growth, but not for elements that substitute for Ca in the crystal lattice. Interpretation of the ecological significance of patterns from field samples therefore needs to consider the impact of the underlying biomineralization processes of the element in question as well as physiological processes regulating the availability of ions for inclusion in the growing crystal lattice. Such understanding will enhance the utility of this technique to address fisheries management questions.