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Abstract Near‐vertical hydrate‐filled fractures are found in subseafloor marine muds, at both advective methane vent sites and at sites without obvious methane and fluid advection (non‐vent sites). At non‐vent sites, the mechanisms that transport methane to the fractures and control how hydrate‐filled fractures form are not well understood. However, these mechanisms are important to establish, as most of Earth's natural gas hydrate is likely bound in marine mud systems. Herein, we focus on understanding the origin of hydrate and how fracture form at non‐vent sites by examining previously hydrate‐bearing fractures in conventional cores taken from Keathley Canyon 151, U.S. northern Gulf of Mexico, drilled by the Gas Hydrate Joint Industry Project in 2005. We combine information from well logs, sediment cores, and science party results and add new X‐ray computed tomography of archival sections and scanning electron microcopy of core samples to develop a conceptual model. We propose that locally generated microbial methane is transported via diffusion from small pores in marine mud into biomineralized burrows with larger pore size in a process called short‐range migration. Hydrate forms in burrows once the methane diffuses into them and the dissolved methane concentration exceeds the solubility threshold. When hydrate fills a burrow, heave from additional hydrate growth places stress on the burrow edges, expands the fracture, and creates additional void space in which methane can diffuse and continue forming hydrate. Fractures slowly propagate in the direction of maximum principal stress.