The South China Sea (SCS) is one of the most productive and accumulative marginal shelves of organic carbon in the world. To expound the transformation and preservation of organic carbon in the Northeast SCS, where abundant oil and gas resources have been reported, compound specific sterols in free (FR), base hydrolytic (BH), and acid hydrolytic (AH) forms were analyzed in surface and columnar sediments in May, 2016. The results showed that the total contents of sterols detected ranged from 0.15 to 3.74 ppm dry weight in the surface sediments, and gradually decreased from 3.41 to 0.17 ppm dry weight from surface to deep sediments, in which cholesterol (27?5) was the most abundant component. Sterols mainly existed in the BH form (54.51%–74.20%), followed by the FR form (25.50%–45.49%) and then the AH form (0–3.77%) in turn, in the surface sediments. BH and FR sterols accounted for 0–49.08% and 50.92%–100% in the columnar sediments, while AH sterols were undetectable. The contents of specific sterols indicated that, the primary source of marine organic carbon was about 5 times as much as that from terrestrial input. More and more FR sterols transformed into BH sterols with increasing sedimentary depth, and BH sterols absolutely dominated in sediment depths under 25 cm. The forms of Sterols C27 were maintained at a relative consistence state, but Sterols C28 to C30 degraded gradually during the sedimentation process. It was suggested that the stability of sterols, based on the chemical structures, might be the primary factor controlling their degradation and preservation in deeper sediments. These results would help to understand the organic carbon (OC) transformation in a hydrate formation area in a marginal sea.