A sediment core retrieved from the mud area southwest off Cheju Island (MASCI) was analysed for benthic foraminifera, grain size, and stable isotopes and constrained by AMS¹⁴C dating. Holocene paleoenvironmental changes in this broad shallow shelf were investigated, with special focus on the evolution of the MASCI and its related ocean eddy system. The results indicate that the East China Sea shelf has undergone four major environmental evolution stages during the Holocene. Prior to 9.8 cal. Kyr BP, the benthic foraminiferal assemblages were dominated by low salinity, shallow-water species [Ammonia beccarii (Linnaeus), Elphidium advenum (Cushman), and Cribrononion subincertum (Asano)], reflecting a near-coast-deposit environment. A noticeable transition of the benthic foraminifera, from an A. beccarii dominated to Ammonia compressiuscula (Brady) dominated assemblage, taking place at approximately 9.8 cal. Kyr BP together with a contemporaneous increase in δ¹⁸O and δ¹³C, provides evidence that a rapid rise in sea level occurred at this time in the East China Shelf. A gradual increase in δ¹⁸O between 9.8 and 6 cal. Kyr BP indicates a steady strengthening influence of open ocean water on the area under study. A sudden increase in the abundance of benthic foraminifera along with a decrease in the coarse fraction imply that an early eddy circulation system was established since almost 6 cal. Kyr BP in the MASCI. This eddy circulation system was quite weak but gradually strengthened between 6 and 3 cal. Kyr BP, possibly due to the intrusion of the Yellow Sea Warm Current (YSWC). A more stable mud deposition period, characterised by a high sedimentation rate of fine-grained sediment and lighter value of δ¹³C, starting at approximately 3 cal. Kyr BP, indicates that the MASCI was formed mainly during the late Holocene. We believe that the strengthened YSWC since 3 cal. Kyr BP might increase the trap efficiency of the eddy system, thereby accounting for the high sedimentation rate of mud deposits during this period.