A valid assessment of selective aerobic degradation on organic matter (OM) and its impact on OM-based proxies is vital to produce accurate environmental reconstructions. However, most studies investigating these effects suffer from inherent environmental heterogeneities. In this study, we used surface samples collected along two meter-scale transects and one longer transect in the northeastern Arabian Sea to constrain initial OM heterogeneity, in order to evaluate selective aerobic degradation on temperature, productivity and alteration indices at the sediment-water interface. All of the studied alteration indices, the higher plant alkane index, alcohol preservation index, and diol oxidation index, demonstrated that they are sensitive indicators for changes in the oxygen regime. Several export production indices, a cholesterol-based stanol/stenol index and dinoflagellate lipid- and cyst-based ratios, showed significant (more than 20%) change only over the lateral oxygen gradients. Therefore, these compounds do not exclusively reflect surface water productivity, but are significantly altered after deposition. Two of the proxies, glycerol dibiphytanyl glycerol tetraether-based TEX86 sea surface temperature indices and indices based on phytol, phytane and pristane, did not show any trends related to oxygen. Nevertheless, unrealistic sea surface temperatures were obtained after application of the TEX86, TEX86L, and TEX86H proxies. The phytol-based ratios were likely affected by the sedimentary production of pristane. Our results demonstrate the selective impact of aerobic organic matter degradation on the lipid and palynomorph composition of surface sediments along a short lateral oxygen gradient and suggest that some of the investigated proxies may be useful tracers of changing redox conditions at the sediment-water interface.