Natural gas hydrates in continental margin sediment can be inferred from the widespread occurrence of an anomalous seismic reflector which coincides with the predicted transition boundary at the base of the gas hydrate zone. Direct evidence of gas hydrates is provided by visual observations of sediments from the landward wall of the Mid-America Trench off Mexico and Guatemala, from the Blake Outer Ridge off the southeastern United States, and from the Black Sea in the U.S.S.R. Where solid gas hydrates have been sampled, the gas is composed mainly of methane accompanied by CO₂ and low concentrations of ethane and hydrocarbons of higher molecular weight. The molecular and isotopic composition of hydrocarbons indicates that most of the methane is of biolog cal origin. The gas was probably produced by the bacterial alteration of organic matter buried in the sediment. Organic carbon contents of the sediment containing sampled gas hydrates are higher than the average organic carbon content of marine sediments. The main economic importance of gas hydrates may reside in their ability to serve as a cap under which free gas can collect. To be producible, however, such trapped gas must occur in porous and permeable reservoirs. Although gas hydrates are common along continental margins, the degree to which they are associated with significant reservoirs remains to be investigated.