The concept of the wave-graded continental shelf, with sea floor sediment coarsening from offshore mud to shoreface sand, has been well known from the time of Johnson (1919). Although most of the modern shelf shows textures unrelated to water depth on account of relict features or sediment starvation, the geological record is more likely to preserve sites where sediment is being fed to a subsiding inner-shelf. These consistently show the landward-coarsening pattern of the wave-graded shelf, recording past water depth history in accumulated sea floor sediment. The landward-coarsening pattern is driven primarily by wave-induced bed shear stress, which increases shoreward exponentially, although it also varies from place to place with wave climate, and can be influenced by sediment concentration and currents. In this study, the relationship between bed shear stress, sediment texture and water depth has been investigated by comparing per cent mud and wave climate data from shore-normal transects of three modern wave-graded coastal settings: Wellington Harbour (low energy) and the Manawatu coast (moderate energy) in New Zealand, and Monterey Bay in California (moderate–high energy). Samples from all three locations show a progressive change from poorly sorted mud offshore to well-sorted fine sand nearshore, with the sand–mud transition ranging from 3 m (low energy) to 50 m (moderate–high energy), reflecting differences in average bed shear. Repeat measurements of per cent mud on seasonal, annual and decadal time scales along a Manawatu coastal transect showed no measurable change, demonstrating equilibrium between sediment supply, wave energy, water depth and sediment texture. A simple model based on the relationship between wave climate, shear stress and per cent mud, and using data and conditions from the modern Manawatu coast, is applied to two mid-Pliocene cyclothems exposed 50 km inland, giving results comparable with estimates from foraminifera and the deep-sea isotope record. Per cent mud offers more detail for palaeobathymetric trends in shallow water shelf strata than other proxy depth recorders, although it is limited to depths above wave base and requires an independent estimate of wave climate if depths are to be quantified.