The presence of smectitic shales can cause problems for drillers in the form of wellbore stability problems resulting from the presence of swelling clays and overpressures due to low permeability. Prediction of overpressures in such sediments is hampered by interlayer water in the mineral structure that is not accounted for in porosity determinations whether by wireline methods or laboratory drying techniques. This study looks at the composition and microstructural response to stress of acoustic properties of the Muderong Shale, a regional seal in the Carnarvon Basin on the Northwest Shelf of Australia. Physical properties and composition are intimately tied to the acoustic response of the Muderong Shale at both sonic and ultrasonic frequencies. Velocity variations from downhole shales in wells from the Carnarvon Basin can mainly be tied to smectite content but also to overpressure. The presence of smectite results in anomalously low velocities in the Mud-erong Shale and the development of both compaction fabrics and induced microfracture generation result in significant acoustic anisotropy. The high degree of anisotropy of the Muderong Shale at ambient pressure can be related to the presence of both a sedimentary compaction fabric and high aspect ratio compliant microfractures. Variations in velocity and elastic constants can be related to the microstructural response to imposed stresses. Determination of the relative contributions of these two causes of anisotropy in shales may provide a method by which to distinguish overpressure-generating mechanisms from acoustic data.