The impact of asteroids and comets with planetary surfaces is one of the most catastrophic, yet ubiquitous, geological processes in the solar system. The Chicxulub impact event, which has been linked to the Cretaceous-Paleogene (K-Pg) mass extinction marking the beginning of the Cenozoic Era, is arguably the most significant singular geological event in the past 100 million years of Earth’s history. The Chicxulub impact occurred in a marine setting. How quickly the seawater re-entered the newly formed basin after the impact, and its effects of it on the cratering process, remain debated. Here, we show that the explosive interaction of seawater with impact melt led to molten fuel–coolant interaction (MFCI), analogous to what occurs during phreatomagmatic volcanic eruptions. This process fractured and dispersed the melt, which was subsequently deposited subaqueously to form a series of well-sorted deposits. These deposits bear little resemblance to the products of impacts in a continental setting and are not accounted for in current classification schemes for impactites. The similarities between these Chicxulub deposits and the Onaping Formation at the Sudbury impact structure, Canada, are striking, and suggest that MFCI and the production of volcaniclastic-like deposits is to be expected for large impacts in shallow marine settings.