Remotely operated vehicle (ROV) observations have recently revealed seep dolomite deposits covering the seafloor on Middle Dongsha of the South China Sea (SCS). Spurred by these findings, we studied the mineralogical and geochemical properties to examine the seep dolomite’s origin, precipitation mechanism, and formation environment. These carbonates mainly comprise dolomite (from 64 to 84 wt%), followed by small amounts of calcite (from 1 to 3 wt%), locally containing magnesite (∼4 wt%), and goethite (∼14 wt%). Extensively developed mineralized cells containing high Mg and Ca contents found in chimneys imply that microbially-mediated processes probably participated in the reactivation of dolomite precipitation. The moderate and concentrated δ13C values (from −36.64 to −39.16‰, V-PDB) indicated that the carbon in carbonates was mainly derived from thermogenic methane. The methane fluids most likely ascended beneath the volcaniclastic unit and inherited enriched positive Eu anomalies due to fluid–rock interactions during their seepage along tectonic faults to the seafloor. The δ18O values (4.2–4.8‰, V-PDB) of carbonate suggested that an 18O-depleted fluid was involved in carbonate precipitation. The high total Rare-Earth Element contents (ΣREE) of seep carbonates varied from 61 ppm to 92 ppm, reflecting the chemical composition of surrounding pore waters at the time of carbonate precipitation, exhibiting less mixing with seawater. It may also indicate higher alkalinity and pH of the pore water. Although the sea-like REE patterns (HREE-enriched, negative Ce anomalies) are not caused by seawater, they may be due to the complexation competition between humic acid (HA) and carbonate for REE at high pore-water alkalinity and high CO32− concentrations. This is consistent with the dolomite chimney pointing toward a formation environment in relatively deep sediments, in particular, close to the sulfate-methane interface in sediments, where the bicarbonate concentration reaches its maximum due to AOM. Moderate Mo and no U enrichments appeared in the carbonates, suggesting a relatively lower intensity of methane seepages with relatively reduced AOM rates. The wide range of (Mo/U)EF values and U–Mo covariation indicates the very dynamic AOM rate (slow to moderate) and redox conditions (mostly suboxic–anoxic, occasionally sulfidic conditions) during carbonate formation due to episodically changing seepage activity.