Shallow-marine methane seeps, described here for the first time from the Australian Upper Paleozoic, are among few reported globally from the Carboniferous–Permian. Carbonate-cement fabrics, δ13C values and biota indicate that concentrations of nodules scattered in a narrow stratigraphic interval within the lower Holmwood Shale in the Irwin Basin formed in methane seeps. Based on ammonoids, this zone belongs within the Sakmarian. The Holmwood Shale overlies the glaciogenic Nangetty Formation that sits on crystalline Precambrian basement. The Holmwood is little deformed, shows low thermal maturation and has been covered by less than 1000 m of Permian and Neogene strata. The nodules are cementstone with complex multiphase cement fabric and δ13C values (mostly, -25 – -45‰ VPDB) below the ranges for normal-marine limestone and carbonate nodules common in marine shale elsewhere. A biota preserved in nodules of the seep deposits includes representatives of three ecosystems: seep, pelagic, and coastal plain. The seep biota, new to the Australian Permian, consists of small thickets with a framework of tubeworms, less common algal-like Tubiphytes, and problematica (? algae or sponges). Other components include microbial mats, macrophyte alga Litostroma (first report from Gondwana); foraminifers; sponges with siliceous monaxon spicules; a new group of small, lightly ornamented rostroconchs; microgastropods and rare larger types; ostracods and minute scolecodonts from polychaete jaws. Elements of the pelagic ecosystem are ammonoids (abundant in enclosing shale) and marine microphytoplankton. Probable vertebrate bone (possibly amphibians) and diverse spores and pollen from land plants come from the adjoining coastal plain. The surrounding mudstone lacks benthic macrofauna but includes an unusual assemblage of siliceous agglutinated foraminifers. The seeps were oases of high organic productivity on an otherwise barren muddy seafloor. The Holmwood Shale's seep carbonates have close similarities to modern seep deposits in shallow-marine settings. They more closely resemble the modern deposits than some of the few others interpreted elsewhere from the Carboniferous–Permian, but seem close to equivalents in shale of latest Pennsylvanian (Gzhelian) age overlying glaciogenic deposits in the Namibian sector of East Gondwana. In both regions, deglaciation of Pennsylvanian ice sheets that covered large parts of East Gondwana, dewatering of melt-water from the glaciogenic sediment pile after burial, and associated release of probable biogenic methane seems to have coincided with formation of seeps.