AbstractThe Liangzhu City site, located in the center of the Liangzhu Culture (3300–2300 cal. BC), is characterized by gigantic earthen mounds containing about 10 million m3 of earth, as well as crisscrossed waterways that flow through the mounds. This study presents a geoarchaeological study of a mound structure adjacent to the South Zhongjiagang channel of Liangzhu City. By applying soil micromorphological and associated bulk sedimentological analyses, this study reconstructed the site formation processes and multiple occupations of the mound structure together with related hydrological changes. The results suggest that this site is in a near‐bank activity area formed due to the build‐up of sequential settlement buildings and activity deposits. At least six intact activity surfaces have been recognized based on the presence of intact matting materials and the trampling of fine anthropogenic debris. This study thus reports the first detailed micromorphological study of Neolithic floor sequences in East China. In addition, lipid and isotope analyses of the plant material shed light on how Liangzhu people exploited grass materials, especially bamboo, for both long‐term and short‐term occupation near waterways. This study has demonstrated the potential of micromorphological studies for reconstructing site formation processes and identifying different types of human activities in a landscape that was highly modified by Neolithic people. The findings have far‐reaching implications for archaeological research around the Tai Lake region and investigations of other large earthen mound archaeological sites around the world.