The organic matter that escapes decomposition is buried and preserved in marine sediments, with much debate as to whether the amount depends on bottom-water O2 concentration. One group argues that decomposition is more efficient with O2, and hence, organic carbon will be preferentially oxidized in its presence, and preserved in its absence. Another group argues that the kinetics of organic matter decomposition are similar in the presence and absence of O2, and there should be no influence of O2 on preservation. A compilation of carbon preservation shows that both groups are right, depending on the circumstances of deposition. At high rates of deposition, such as near continental margins, little difference in preservation is found with varying bottom-water O2. It is important that most carbon in these sediments decomposes by anaerobic pathways regardless of bottom-water O2. Hence, little influence of bottom-water O2 on preservation would, in fact, be expected. As sedimentation rate drops, sediments deposited under oxygenated bottom water become progressively more aerobic, while euxinic sediments remain anaerobic. Under these circumstances, the relative efficiencies of aerobic and anaerobic decomposition could affect preservation. Indeed, enhanced preservation is observed in low-O2 and euxinic environments. To explore in detail the factors contributing to this enhanced carbon preservation, aspects of the biochemistries of the aerobic and anaerobic process are reviewed. Other potential influences on preservation are also explored. Finally, a new model for organic carbon decomposition, the "pseudo-G" model, is developed. This model couples the degradation of refractory organic matter to the overall metabolic activity of the sediment, and has consequences for carbon preservation due to the mixing together of labile and refractory organic matter by bioturbation.