Abstract Organo-clay fabric and physico-chemistry of marine mud play important roles in early sediment diagenesis including the development of mass physical properties, consolidation behavior, and sequestration of organic matter (OM) in sediments over geologic time. Transmission electron microscopy (TEM) images of nano- and microfabric reveal that organic matter is sequestered following enzymatic digestion despite the pervasive openness of pore-fluid pathways observed in 3D rotated images. The locations of sequestered organic matter correspond to those predicted by modeling of the potential energy of interaction. Initial flume experiments on high porosity clay-mineral-rich mud deposited under dynamic flow and static (vertical settlement) conditions demonstrate differences in clay fabric and the distribution of organic matter (we define the term organo-clay fabric as the contiguous association and arrangement of organic matter and clay domains). These differences in organo-clay fabric impact the preservation-degradation mechanisms and dynamics during depositional and burial processes. Organo-clay fabric and physico-chemical modeling of potential energy fields coupled with direct observations of organo-clay fabric, three-dimensional (3-D) clay fabric reconstructions, sediment static and dynamic properties, and controlled flume experiments are providing new insight into the developmental history of sedimentary sequences, nano- to macroscale environmental processes, and diagenesis from unconsolidated mud to shale.