The chemoautotrophic fixation of carbon dioxide is responsible for an appreciable component of the organic matter apparent as a carbon-rick peak at 40 cm sub-bottom in the marine muds of Halifax Harbour, Nova Scotia, Canada. Dissolved oxygen and sulfide profiles show that the 40 cm horizon represents a transitional environment from aerobic to underlying anaerobic conditions. A dissolved sulfate maximum and pH minimum at 40 cm indicate that sulfur-oxidizing chemoautotrophs are associated with the organic carbon production at this horizon. The stimulation of CO2-fixation by thiosulfate and inhibition by anaerobic conditions, ammonia, nitrate and nitrite further support the contention that sulfur-oxidizers are primary producers at this horizon. Heterotrophic activity data show that both aerobic and anaerobic heterotrophs are active in the sediments. These data, in conjunction with the measurement of CO2-fixation and the calculation of organic carbon accumulation over time, show that the peak of organic carbon observed is residual carbon that is not heterotrophically recycled to CO2 at the 40 cm horizon.