Porewater profiles in sediment cores from mangrove-dominated coastal lagoons (Celestún and Chelem) on the Yucatán Peninsula, Mexico, reveal the widespread coexistence of dissolved methane and sulfate. This observation is interesting since dissolved methane in porewaters is typically oxidized anaerobically by sulfate. To explain the observations we used a numerical transport-reaction model that was constrained by the field observations. The model suggests that methane in the upper sediments is produced in the sulfate reduction zone at rates ranging between 0.012 and 31 mmol m⁻² d⁻1, concurrent with sulfate reduction rates between 1.1 and 24 mmol SO4²⁻ m⁻² d⁻¹. These processes are supported by high organic matter content in the sediment and the use of non-competitive substrates by methanogenic microorganisms. Indeed sediment slurry incubation experiments show that non-competitive substrates such as trimethylamine (TMA) and methanol can be utilized for microbial methanogenesis at the study sites. The model also indicates that a significant fraction of methane is transported to the sulfate reduction zone from deeper zones within the sedimentary column by rising bubbles and gas dissolution. The shallow depths of methane production and the fast rising methane gas bubbles reduce the likelihood for oxidation, thereby allowing a large fraction of the methane formed in the sediments to escape to the overlying water column.