Fiftyfive sediment samples from innershelf between Bhimunipatnam and Kalingapatnam were analysed by X-ray diffraction for the composition and distribution of clay minerals. In addition to seabed samples, residual soils and fluvial sediments from hinterland were also studied. Smectite, illite and kaolinite, in that order of abundance, constituted chief clay mineral groups in shelf sediments. Smectite zone is influenced mostly by the Godavari fiver derived from Deccan Traps and transported northward by longshore currents. Illite and kaolinite appeared to originate from coastal red sediments and by rivers Nagavali, Vamsadhara, Gostani, Nellimarla and Kandivalasa draining the Eastern Ghats. The conspicuous absence of chlorite and paucity of kaolinite in the shelf sediments suggested that the influence of the river-borne sediments from the north is negligible. Source rock and fluvial input influenced composition of clay minerals whereas northeasterly littoral drift influenced distribution pattern of clay minerals.