The production and decomposition of litter in mangroves plays a significant role in the nutrient and organic carbon cycles. These can be highly variable both spatially and temporally as a result of numerous factors including tidal range, forest type, abundance and type of herbivorous fauna, temperature, and microbial activity. Mangroves also play an important role in blue carbon sequestration, with their status as carbon sinks crucial in mitigating against greenhouse gas-induced climate change. Blue carbon is a term used to describe the carbon captured by oceans and coastal ecosystems. We review and discuss the current available knowledge regarding sources of organic matter (OM) in mangroves as well as the roles of benthic macrofauna, water and microbial activity in the decomposition of OM in order to gain a better understanding of the decompositional processes that take place. Macrofauna break down and bury litter, thereby improving litter quality, in turn increasing decomposition rates via leaching and microbial activity. Microbial decomposition in mangroves is slow as a result of phenolic concentrations in the litter. A build-up of phenolic compounds inhibits microbial activity leading to the accumulation of OM in mangroves. Although knowledge has improved, there are still gaps in the information available and we still have an incomplete picture of the decompositional process in mangroves, and in particular the formation of blue carbon stores, necessitating further research.