The flux and compositions of solvent-extractable lipid fractions were measured in particulate matter collected periodically by moored sediment traps in the Santa Monica Basin from 1985–1988. The purpose was to assess the compositional changes during settling, the carbon dynamics in the basin and to estimate the impacts of energy-related by-products on the surface sediments. Sediment traps recorded consistently high lipid fluxes in the eastern slope relative to the central basin, reflecting elevated terrigenous carbon inputs possibly from land-based human activities. Generally, lipid fluxes decrease offshore but increase vertically with water depth below ∼500m, implying lateral transport of particles. The steep decline of flux in the top 500m of the water is related to the rapid decomposition and mineralization of the marine-derived cellular carbon compounds. Less than 5% of the marine lipid components reach the seabed. In contrast, preferential preservation of terrigenous lipid is clearly evident from the chemistry of deeper traps and surface sediments. The lateral transport of particles is reflected in the presence of higher plant-derived lignin phenols and sewage-derived coprostanol and epicoprostanol in the deep trap material as well as in surface sediment throughout the basin. Petroleum triterpanes characteristic of natural seepage also permeates through the entire basin. Based on the data collected from both the trap particulte matter and surface sediments, a carbon budget for the Santa Monica Basin has been constructed.