Bed surface coarsening was found to be an important effect for the formation of ripples and the dynamics of the boundary layer above a predominantly silt‐sized sediment bed (median particle size equal to 26 μm; ∼20% fine sand, 70% silt, 10% clay) under oscillatory flow (with orbital velocities of 0.32–0.52 m/s) in a laboratory wave duct. Following bed liquefaction, substantial winnowing of the bed surface occurred due to entrainment of finer material into suspension. Bed surface coarsening was quantified with micro‐scale visualization using a CCD (charged‐coupled device) camera. Under most wave orbital velocities investigated, the coarse surface particles were mobilized as a near‐bed transport layer approximately 4 grain‐diameters thick. The transport of these coarse sediments ultimately produced suborbital or anorbital ripples on the bed, except for the highest orbital velocities considered where the bed was planar. Micro‐scale visualizations were used to construct a maximum (particle) velocity profile extending through the near‐bed transport layers using particle‐streak velocimetry (PSV). These profiles had a distinctive kink in log linear space at the height of the transport layer, suggesting that the near‐bed sediment transport reduced skin friction and contributed to the boundary roughness through extraction of momentum.