Fine sediment (silt and clay) plays an important role in the physical, ecological, and environmental conditions of coastal systems, yet little is known about the dispersal and fate of fine sediment across coastal margin settings outside of river mouths. Here I provide simple physical scaling and detailed monitoring of a beach nourishment project near Imperial Beach, California, with a high portion of fines (40% silt and clay by weight). These results provide insights into the pathways and residence times of fine sediment transport across a wave-dominated coastal margin. Monitoring of the project used physical, optical, acoustic, and remote sensing techniques to track the fine portion of the nourishment sediment. The initial transport of fine sediment from the beach was influenced strongly by longshore currents of the surf zone that were established in response to the approach angles of the waves. The mean residence time of fine sediment in the surf zone—once it was suspended—was approximately 1 hour, and rapid decreases in surf zone fine sediment concentrations along the beach resulted from mixing and offshore transport in turbid rip heads. For example, during a day with oblique wave directions and surf zone longshore currents of approximately 25 cm/s, the offshore losses of fine sediment in rips resulted in a 95% reduction in alongshore surf zone fine sediment flux within 1 km of the nourishment site. However, because of the direct placement of nourishment sediment on the beach, fine suspended-sediment concentrations in the swash zone remained elevated for several days after nourishment, while fine sediment was winnowed from the beach. Once offshore of the surf zone, fine sediment settled downward in the water column and was observed to transport along and across the inner shelf. Vertically sheared currents influenced the directions and rates of fine sediment transport on the shelf. Sedimentation of fine sediment was greatest on the seafloor directly offshore of the nourishment site. However, a mass balance of sediment suggests that the majority of the fine sediment moved far away (over 2 km) from the nourishment site or to water depths greater than 10 m, where fine sediment represents a substantial portion of the bed material. Thus, the fate of fine sediment in nearshore waters was influenced strongly by wave conditions, surf zone and rip current transport, and the vertical density and flow conditions of coastal waters.