Here we describe a new reaction-transport model that quantitatively examines δ13C profiles of pore-water methane and dissolved inorganic carbon (DIC) (δ13CCH4 and δ13CDIC) in the anoxic sediments of the Santa Barbara Basin (California Borderland region). Best-fit solutions of the model to these data suggest that CO2 reduction is the predominant form of methanogenesis in these sediments. These solutions also accurately reproduce the isotope depth profiles, including a broad minimum in the δ13CDIC profile and a much sharper (angular) minimum in the δ13CCH4 profile, both of which appear near the base of the transition zone in the sediments between sulfate reduction and methanogenesis (referred to here as the sulfate-methane transition zone, or SMTZ). Such minima in pore-water profiles of δ13CCH4 near the base of the SMTZ have been seen in a number of other marine sediments across a range of depth and timescales. We show here that this minimum in the δ13CCH4 profile in Santa Barbara Basin sediments results from the balance between (1) anaerobic oxidation of methane (AOM), which leads to an increase in δ13CCH4 with decreasing depth in the sediment column through and above the SMTZ; (2) methanogenesis, which produces 13C-depleted methane, both in and below the SMTZ; and (3) an upward flux of CH4 from depth that is relatively enriched in 13C as compared with the methane in these pore waters. Possible sources of this deep methane include the following: geologic hydrocarbon reservoirs derived from ancient source rocks; decomposition of buried gas hydrates; and biogenic (or perhaps thermogenic) methane produced hundreds of meters below the seafloor stimulated by increasing temperatures associated with the sediment geothermal gradient. Although we are unable to resolve these possible sources of deep methane, we believe that the significance of an upward methane flux as an explanation for minima in δ13CCH4 pore-water profiles may not be limited to Santa Barbara Basin sediments but may be common in many continental margin sediments.