The present paper reviews the current knowledge on diagenetic carbon transformations at the oxic/anoxic interface in coastal marine sediments. Oxygen microelectrodes have revealed that most coastal sediments are covered only by a thin oxic surface layer. The penetration depth of oxygen into sediments is controlled by the balance between downward transport and consumption processes. Consumption of oxygen is directly or indirectly caused by respiration of benthic organisms. Aerobic organisms have the enzymatic capacity for complete oxidation of organic carbon. Anaerobic decay occurs stepwise, involving several types of bacteria. Large organic molecules are first fermented into small moieties. These are then oxidized completely by anaerobic respirers using a sequence of electron acceptors: Mn⁴⁺, NO₃ ^-, Fe³⁺, SO₄ ^2- and CO₂. The quantitative role of each electron acceptor depends on the sediment type and water depth. Since most of the sediment oxygen uptake is due to reoxidation of reduced metabolites, aerobic respiration is of limited importance. It has been suggested that sediments contain three major organic fractions: (1) fresh material that is oxidized regardless of oxygen conditions; (2) oxygen sensitive material that is only degraded in the presence of oxygen; and (3) totally refractory organic matter. Processes occurring at the oxic/anoxic boundaries are controlled by a number of factors. The most important are: (1) temperature, (2) organic supply, (3) light, (4) water currents, and (5) bioturbation. The role of bioturbation is important because the infauna creates a three-dimensional mosaic of oxic/anoxic interfaces in sediments. The volume of oxic burrow walls may be several times the volume of oxic surface sediment. The infauna increases the capacity, but not the overall organic matter decay in sediments, thus decreasing the pool of reactive organic matter. The increase in decay capacity is partly caused by injection of oxygen into the sediment, and thereby enhancing the decay of old, oxygen sensitive organic matter several fold. Finally, some future research directions to improve our understanding of diagenetic processes at the oxic/anoxic interface are suggested.