There is a net flow of Gulf of Mexico high salinity water into Terminos Lagoon through the eastern inlet, mixing with runoff from three large rivers, and a net flow of low-salinity lagoon water out through the western inlet. The average circulation is reflected in distribution patterns of salinity, sediment size distributions, forams, percent of calcium carbonate in the sediments, and water turbidity. Relatively high organic productivity is indicated by numerous large standing stocks of forams.

The lagoon is on the boundary between biogenic carbonate sediments on the east and detrital river-borne sediments on the west. The modern lagoon barrier began during the Holocene on a foundation of calcilutite when sea level was at about -- 10 m. When it reached about its present level the inlets were east of the present ones. Predominant flow of lagoon water out through the western inlet as at present is indicated by river-borne detritus under a surface cap of biogenic carbonate on the western end of the barrier. The seaward side of the barrier is being eroded, except on the western end, where there is deposition. The lagoon is essentially filled with sediment, and most detritus being delivered by rivers is bypassing the lagoon.

It is suggested that deposits similar to those in Terminos Lagoon can be identified in ancient sediments.