Based on the data obtained under the China-Korea joint project (1997-2001) and historic observations, the distribution, transportation and sedimentation of sediment in the southern Yellow Sea (SYS) are discussed, and the controversial formation mechanism of muddy sediments is also explored. The sediment transport trend analysis indicates that the net transport direction of sediment in the central SYS (a fine-grained sediment deposited area) points to $123.4^{circ}E,;35.1^{circ}N$, which is a possible sedimentation center in the central SYS. The sediment transport pattern is verified by the distribution of total suspended matter (TSM) concentration and ${delta}^{13}C$ values of particulate organic carbon (POC), the latter indicates that the bottom water plays a more important role than the surface water in transporting the terrigenous material to the central deep-water area of the SYS, and the Yellow Sea circulation is an important control factor for the sediment transport pattern in the SYS. The carbon isotope signals of organic matter in sediments indicate that the Shandong subaqueous delta has high sedimentation rate and the deposited sediments originate mainly from the modern Yellow River. The terrigenous sediments in deep-water area of the SYS originate mainly from the old Yellow River and the modern Yellow River, and only a small portion originates from the modern Yangtze River. The analytical results of TSM and stable carbon isotopes are further confirmed by another independent tracer of sediment source, polycyclic aromatic hydrocarbons (PAHs). Five light mineral provinces in the SYS can be identified and they indicate inhomogeneity in sources and sedimentary environment. The modern shelf sedimentary processes in the SYS are controlled by shelf dynamic factors. The muddy depositional systems are produced in the shelf low-energy environments, which are controlled by some meso-scale cyclonic eddies (cold eddies) in the central SYS and the area southwest of the Cheju Island. On the contrary, an anticyclonic muddy depositional system (warm eddy sediment) appears in the southeast of the SYS (the area northwest of the Cheju Island). In this study, we give the cyclonic and anticyclonic eddy sedimentation patterns.