The first stage of a seafloor observatory to monitor marine gas hydrates will be deployed in the Gulf of Mexico in the fall of 2005. One component of the monitoring station is a vertical line hydrophone array moored on the seafloor. This paper reports research to investigate using matched field inversion of sound generated by passing ships to detect changes in the geoacoustic parameters of the seabed that may indicate the occurrence of a gas hydrate dissociation event. First, synthetic multifrequency data were used to investigate the performance of the inversion method for estimating sediment sound speeds near the seafloor. The synthetic data were generated using the parabolic equation method for a geoacoustic environment that simulated the seabed at the site in Mississippi Canyon. The geoacoustic model consisted of a multilayered structure with relatively slow sound speeds to significant depths below the seafloor. The inversion based on normal mode replica fields indicated that performance strongly depends on using a realistic parametrization of the geoacoustic model. Experimental ship noise data were recorded along radial tracks in a preliminary deployment of the vertical array. Results are reported for estimating a geoacoustic model from the noise data.