A model was constructed to test the hypothesis that differential compaction could cause faulting in unconsolidated sediment. Mud volcanoes were produced during uniform, passive compaction, and faults were produced during forced, differential compaction of clay-water suspensions. Stress analysis indicates that the faults are simple shear failures. The stress field is approximately thatof a point-supported beam with distributed loads along part of the length. Differential compaction faults may occur wherever large changes in total compaction of adjacent sediment masses occur, either as a result of change in thickness or of facies change. In the Gulf Coast area they occur on the inshore side of flexures, where both thickening and change from sand to clay facies occur in the offshoredirection.