Tropical wetlands are one of the major terrestrial carbon sinks during the Holocene. However, there is considerable uncertainty in the development history of tropical wetlands in different geographical regions. In this study, the main objective was to synthesize the formation history of mangrove wetlands along the southwest coast of Sri Lanka in terms of past sea-level records in the region. Sedimentological observations were determined using representative sediment cores at Telwatta. Geochemical characteristics of sediment cores were determined using δ13C and δ15N stable isotopes, X-ray diffraction (XRD), and Fourier transform infrared spectroscopy (FTIR) analyses. The chronology was obtained using accelerated mass spectrometry 14C data for fossil coral samples. Black color fine to medium-grained core sediments can be identified as H3/H4 levels of decomposition based on the modified Von Post classification. This study identified that organic-rich sediment accumulation was initiated over the basal/inland coral deposits, any time after middle Holocene sea-level highstands. In this study, paleo sea-level indicator (i.e., basal coral in present-day land area) suggests that sea-level was about 1–2 m higher than present during ca. 5500 Cal year B.P. Heavy rainfall on the southwestern slopes also promotes the preservation of organic-rich sediments with seasonal flooding. The temporal variations of organic matter and carbonate contents suggest that there are no clear facies variations in this sedimentary succession. XRD analysis identified clay minerals such as montmorillonite and illite, and it indicates the deposition of sediments from a near distance or in situ source materials due to reinforced physical erosion. Stable isotopic values (δ13C = –27.18‰ to –26.46‰ and δ15N = 6.64‰ to 8.01‰) reflect the mixing of freshwater sources (i.e., dissolved organic carbon and nitrate) to C3 terrestrial plants dominant sediments. The humification index based on FTIR results (aromatic C=C and asymmetric COO- group vibrations to polysaccharides (1630/1053 cm −1)) suggests a depleted level for decarboxylation below ∼30 cm. The ratio of carboxyl C=O and aromatic ester group vibrations to polysaccharides (1720/1053 cm −1) also shows similar variations with the humification index. Looking forward, the 1720/1053 cm −1 ratio can be proposed as a possible geochemical proxy for determining the degree of formation of humic acids in organic-rich sediments.