Surficial carbonate sediments on the southern continental shelf of Australia are cool-water in aspect and composed of biogenic particles produced largely during the late Quaternary. Current understanding is that such sediments are calcite-dominated, as were their older Cenozoic counterparts. The Holocene fraction of these sediments in modern open-shelf, neritic environments between 30 and 350 meters water depth is, however, 50% to 80% aragonite. Scant evidence of significant former aragonite in many cool-water carbonate sedimentary rocks implies that most aragonite is lost before such sediments exit the marine diagenetic environment. Although marine dissolution must be taking place in such settings, the conundrum is exacerbated because seawater over the shelf in southern Australia is saturated with respect to aragonite. It is proposed that the aragonite, from skeletons of gastropods, infaunal bivalves, and certain bryozoans, is dissolved in the shallow subsurface, probably as the byproduct of bacterial degradation of sedimentary organic matter. As a consequence, the geological and paleontological record of many cool-water carbonates is strongly biased, and the inferred original calcitic composition of such sediments is the product of early diagenetic taphonomic loss, not selective biogenic productivity. The net result is not only dissolution of aragonite but also neomorphism of Mg-calcite to calcite with a marine geochemical signature. Synsedimentary aragonite loss, by removing CaCO3 that is usually available for calcite cementation during meteoric diagenesis, leads to retarded lithification of these cool-water carbonates until deeply buried. Such removal of a significant carbonate fraction during deposition likely contributes to the low rates of cool-water sediment accumulation.