Seismic data and seafloor samples indicate the presence of free gas, gas hydrate, and fluid seeps south of the Gorda Escarpment, a topographic feature that marks the eastern end of the Gorda/Pacific transform plate boundary southwest of Cape Mendocino, California. In spite of high sedimentation rates and high biological productivity, direct or indirect indicators of gas hydrate presence had not previously been recognized in this region, or along transform margins in general. Gas is indicated by a bottom simulating reflection (BSR) observed near the Gorda Escarpment, by bright spots and gas curtains scattered throughout the sedimentary basin to the south, and by δ13C and δ18O isotopes of carbonates, which are similar to those recovered from other hydrate-bearing regions. The BSR reflection coefficient of -0.13 ¿ 0.04 and interval velocities as low as 1.38 km/s indicate that free gas is present beneath the BSR. Local shallowing of the BSR toward the north facing Gorda Escarpment and beneath a channel near the crest suggests fluid flow toward the seafloor. Integrating these various observations, we suggest a scenario in which methane is formed in thick Miocene and Pliocene deposits of organic-rich sediments that fill the marginal basin south of the transform fault. Dissolved and free gas migrates toward the escarpment along stratigraphic horizons, resulting in hydrate formation and in channels, slumps and chemosynthetic communities on the face of the escarpment. We conclude that the BSR appears where hydrate-bearing sediments are uplifted because of current triple junction tectonics.