Bed surface coarsening was found to be an important effect for the formation of ripples and the dynamics of the boundary layer above a predominantly silt-sized sediment bed (median particle size equal to 26 5m; ~20% fine sand, 70% silt, 10% clay) under oscillatory flow (with orbital velocities of 0.32--0.52 m/s) in a laboratory wave duct. Following bed liquefaction, substantial winnowing of the bed surface occurred due to entrainment of finer material into suspension. Bed surface coarsening was quantified with micro-scale visualization using a CCD (charged-coupled device) camera. Under most wave orbital velocities investigated, the coarse surface particles were mobilized as a near-bed transport layer approximately 4 grain-diameters thick. The transport of these coarse sediments ultimately produced suborbital or anorbital ripples on the bed, except for the highest orbital velocities considered where the bed was planar. Micro-scale visualizations were used to construct a maximum (particle) velocity profile extending through the near-bed transport layers using particle-streak velocimetry (PSV). These profiles had a distinctive kink in log linear space at the height of the transport layer, suggesting that the near-bed sediment transport reduced skin friction and contributed to the boundary roughness through extraction of momentum.