The ability of mud aggregates to form depositional bedforms is of considerable sedimentological importance for explaining the geomorphology of the Channel Country of central Australia as well as for understanding the depositional environment of certain argillaceous fluvial sequences in the rock record. The sediment transport and bedform development of mud aggregates from the floodplain of Cooper Creek, central Australia, was examined in a laboratory flume over a range of flow conditions. The aggregates were found to be clay-rich (>60% clay), nonsaline (<0·02%), fine sand-sized (mean d50=0·13 mm), low density (2300 kg m−3) and water-stable. Three wetting rates were applied to the sediment in the laboratory prior to wet sieving to replicate various field conditions and results in three mean aggregate sizes. Immersion wetting (no tension) represents inundation of the sediment by overland flow and results in aggregates of 0·13 mm. Tension wetting at 20 and 50 mm corresponds to high- and low-intensity rainfall and results in mean d50 sizes of 0·75 and 0·70 mm, respectively. Immersion wetting is the most applicable wetting mode for hydraulic transport of aggregated sediment on the Cooper Creek floodplain. Considerable variability in sediment transport rates in the field could result from differences in pre-wetting of the aggregated sediment. The dominance of smectite in the clay mineralogy of the sediment is an important factor in the development of the aggregates; disaggregated sediment reaggregated in a laboratory after 2–3 wetting/drying cycles. In flume experiments, bedforms of aggregated mud ranging from lower-regime plane beds to upper-regime antidunes were observed. The aggregates moved predominantly as bedload with measured peak bedload concentrations being high compared with other flume studies. The highly mobile nature of this sediment in the field is due to the ready entrainment of low-density aggregates in the form of self-mulching vertisols across extensive floodplains. The occurrence of low-sinuosity braid-like channels on this extensive low-gradient semi-arid floodplain can be attributed to: (a) the passage of floodwaters across a floodplain with steeper gradients than adjacent more sinuous anastomosing channels; (b) the highly mobile nature of the low-density sediment aggregates; (c) the ability of the aggregates to be transported as bedload; and (d) their durable nature during transport.