Bottom-simulating reflectors (BSR) are observed commonly at a depth of several hundred meters below the seafloor in continental margin sedimentary sections that have undergone recent tectonic consolidation or rapid accumulation. They are believed to correspond to the deepest level at which methane hydrate (clathrate) is stable. We present a model in which BSR hydrate layers are formed through the removal of methane from upward moving pore fluids as they pass into the hydrate stability field. In this model, most of the methane is generated below the level of hydrate stability, but not at depths sufficient for significant thermogenic production; the methane is primarily biogenic in origin. The model requires either a mechanism to remove dissolved methane from the pore fluids or disseminated free gas carried upward with the pore fluid. The model accounts for the evidence that the hydrate is concentrated in a layer at the base of the stability field, for the source of the large amount of methane contained in the hydrate, and for BSRs being common only in special environments. Strong upward fluid expulsion into the hydrate stability field does not occur in normal sediment depositional regimes, so BSRs are uncommon. Upward fluid expulsion does occur as a result of tectonic thickening and loading in subduction zone accretionary wedges and in areas where rapid deposition results in initial underconsolidation. In these areas hydrate BSRs are common. The most poorly quantified aspect of the model is the efficiency with which methane is removed and hydrate is formed as pore fluids pass into the hydrate stability field. The critical boundary in the phase diagram between the fluid-plus-hydrate and fluid-only fields is not well constrained. However, the amount of methane required to form the hydrate and limited data on methane concentrations in pore fluids from deep-sea boreholes suggest very efficient removal of methane from rising fluid that may contain less than the amount required for free gas production. In most fluid expulsion regimes, the quantity of fluid moved upward to the seafloor is great enough to continually remove the excess chloride and the residue of isotope fractionation resulting from hydrate formation. Thus, as observed in borehole data, there are no large chloride or isotope anomalies remaining in the local pore fluids. The differences in the concentration of methane and probably of CO2 in the pore fluid above and below the base of the stability field may have a significant influence on early sediment diagenetic reactions.