Analysis of lipid biomarker compounds associated with surface sediment (0–0.5 or 0–1.0 cm) deposited monthly in Cape Lookout Bight (CLB), North Carolina, U.S.A. revealed seasonal trends in the relative importance of various sources of organic matter. Seasonality in these sources was reflected through variations of source-specific biomarkers in three classes of extractable lipid components—fatty acids, sterols and hydrocarbons, over an 18 month period. Samples collected during periods of sediment accumulation (winter/spring, generally) showed an increase in the relative abundance of algal-derived components. Summer months were characterized by negligible accumulation of sediment and a threefold increase in fatty acids of bacterial origin (i.e. odd numbered n-alkanoic acids and iso- and anteiso-branched acids). Further evidence for the activity of bacteria during summer months was seen by increases in the 5α(H)-cholestan-3ß-ol to cholest-5-en-3ß-ol ratio. These data indicate that bacterially-mediated processes incorporate organic matter derived from other sources, and accumulated during other times of the year, into biomass. As a result, in situ processes control the composition of preserved organic matter at least as much as temporal changes in the delivery of materials derived from allochthonous sources.