Concentrations and isotopic compositions of ethane and propane in cold, deeply buried sediments from the southeastern Pacific are best explained by microbial production of these gases in situ. Reduction of acetate to ethane provides one feasible mechanism. Propane is enriched in C-13 relative to ethane. The amount is consistent with derivation of the third C from inorganic carbon dissolved in sedimentary pore waters. At typical sedimentary conditions, the reactions yield free energy sufficient for growth. Relationships with competing processes are governed mainly by the abundance of H-2. Production of C-2 and C-3 hydrocarbons in this way provides a sink for acetate and hydrogen but upsets the general belief that hydrocarbons larger than methane derive only from thermal degradation of fossil organic material.