Geochemical and microbiological indicators of methane (CH₄) production, oxidation and migration processes in groundwater are important to understand when attributing sources of gas. The processes controlling the natural occurrence of CH₄ in groundwater must be understood, especially when considering the potential impacts of the global expansion of coal seam gas (CSG) production on groundwater quality and quantity. We use geochemical and microbiological data, along with measurements of CH₄ isotopic composition (δ¹³C-CH₄), to determine the processes acting upon CH₄ in a freshwater alluvial aquifer that directly overlies coal measures targeted for CSG production in Australia. Measurements of CH₄ indicate that there is biogenic CH₄ in the aquifer; however, microbial data indicate that there are no methanogenic archaea in the groundwater. In addition, geochemical data, particularly the isotopes of dissolved inorganic carbon (DIC) and dissolved organic carbon (DOC), as well as the concentration of SO₄²⁻, indicate limited potential for methanogenesis in situ. Microbial community analysis also shows that aerobic oxidation of CH₄ occurs in the alluvial aquifer. The combination of microbiological and geochemical indicators suggests that the most likely source of CH₄, where it was present in the freshwater aquifer, is the upward migration of CH₄ from the underlying coal measures.