Dynamic physical and biological seafloor processes shape the three-dimensional stratal architecture of modern and ancient mud-dominated continental shelves. When evaluating a mudstone unit as a potential source, reservoir, or seal, it is imperative to understand the physical, biological, and chemical seafloor processes that control mudstone depositional fabric and diagenesis. This study presents sedimentological, ichnological, and geochemical data of exceptionally preserved mudstone originating from hyperpycnal and possible combined-flow deposits in the Lower Ordovician (Tremadocian) Beach Formation, Bell Island Group, Newfoundland. Seven mudstone facies are described, based on textural, compositional, and ichnological characteristics. Mudstone deposits interpreted to originate from hyperpycnal flows are well cemented, exhibit high chlorite:illite ratios, and contain sharp grain-size changes, commonly forming beds with tripartite subdivisions. Deposits of wave-enhanced sediment gravity flows are, in contrast, poorly cemented illitic mudstone. These mudstone facies exhibit decimeter-thick wave or combined-flow structures within siltstone and very fine sandstone beds as well as laterally discontinuous, nonbioturbated mudstone layers. Beds of this facies have abundant mudstone-on-mudstone and mudstone-on-sandstone erosional contacts. Low organic carbon loading from the nonvegetated early Paleozoic hinterland, combined with a high reworking frequency on a shallow marine wave-dominated shelf, is inferred to have resulted in high remineralization efficiency, and low preservation potential of reactive organic carbon. Burial efficiency and bioavailability of organic matter are considered to be the critical variables controlling infaunal colonization and bioturbation in mud-dominated open-coastline paleoenvironments. This work demonstrates that ancient fine-grained coastal systems are incompletely incorporated into sequence stratigraphic models owing to their atypical proximal-to-distal facies relationships. It is proposed that the spatial organization of fine-grained sediment and facies architecture in such systems are controlled by: 1) frequency of sediment supply events, 2) direction of mud transport, 3) diagenetic reactivity of minerals and bioavailable organic carbon, and (4) residence time of mineral grains and organic matter close to the sediment–water interface.