The characterisation of benthic habitats based on their abiotic (physical and chemical) attributes remains poorly defined in the marine environment, but is becoming increasingly central in the development of marine management plans in Australia and elsewhere in the world. The current study tested this link between physical and biological datasets for the southern Gulf of Carpentaria, Australia. The results presented were based on a range of physical factors, including the sediment composition (grain size and carbonate content), sediment mobility, water depth and organic carbon flux, and their relationship to the distribution and diversity of benthic macrofauna was tested. The results reveal the importance of process-based indices, such as sediment mobility, in addition to other environmental factors in defining the distribution of the benthic macrofauna. The distribution of the benthic macrofauna changes gradationally across the south-eastern Gulf, associated with changes in the per cent mud and gravel, the seabed exposure and the water depth. Patterns of diversity also reveal the importance of physical processes such as sediment mobility in defining benthic habitats. The species–environment relationships observed at the small scale of the current study are consistent with broader associations observed for other organisms within the Gulf.