Matrix-bound phosphine (PH3), a new form of phosphorus, was found in sediment of Jiaozhou Bay in December 2001. Concentration and distribution of PH3 in different layers of sediment with different stations were analyzed. The results show that PH3 concentrations are various with different layers and different stations. PH3 concentrations in the bottom layer of sediment (20-30 cm) are usually higher than those in the surface layer (0-4 cm). The highest PH3 concentration in our investigation reaches 685 ng/kg (dry), which is much higher than those in terrestrial paddy soil, marsh and landfill that have been reported up to now. The correlation analysis indicates that there is no apparent correlation between the concentrations of PH3 and inorganic phosphorus in sediment. However, the correlation between the concentrations of phosphine and organic phosphorus in the bottom layer of sediment is remarkable (R2=0.83). It is considered that PH3 in sediment of Jiaozhou Bay is mainly produced from the decomposition of organic phosphorus in the anaerobic condition, and so PH3 concentrations are related to organic phosphorus concentration and anaerobic environment in sediment. The discovery of PH3 in sediment will give people some new ideas on the mechanisms of phosphorus supplement and biogeochemical cycle in Jiaozhou Bay.