Abstract Contour-parallel sediment dispersal from the Yangtze Estuary into the East China Sea develops a large-scale mud belt on the inner shelf. The sediment dynamics of long-distance dispersal is, however, still an open question. This was investigated by field observations in the 2013 wet season. To clarify the physics of the large-scale mud belt, we examined: (a) shelf circulation currents and their interaction with the Yangtze River; (b) small-/meso-scale processes including bottom boundary-layer flows, stratification and mixing, upwelling, and fronts; and (c) river-borne sediment gravity and contour currents. Field observations demonstrated that estuarine turbidity maxima can trap benthic concentrated suspensions in the near-bed layer and move these downslope of the subaqueous delta, forming sediment gravity currents supported by tidal currents. Compared with near-bed sediment transports, the buoyant coastal current cannot be a controlling factor in the mud belt formation. A constant along-shelf flux of near-bed sediment transport is responsible for the long-distance dispersal of the large-scale mud belt on the East China Sea inner shelf. The upwelling events provide more turbulent energy to sediment suspension under unstably stratified boundary flow. Our recognition of a contour-parallel ‘sediment channel’ has deep implications for understanding this inner-shelf mud belt and ancient mud deposits.