The formation of short-lived backswamps along the Carmel coast of Israel coincides with the rapid global sea-level rise during the late Pleistocene–early Holocene transition. The current study shows that the wetland phenomena originated around 10,000 yr ago and dried up shortly before the local Pre-Pottery Neolithic humans settled on the wetland dark clay sediments 9430 cal yr BP. Palaeontological and stable-isotope data were used in this study to elucidate previously published sedimentological reconstruction obtained from a core drilled into the western trough of the Carmel coastal plain. The water body contained typical brackish calcareous fauna, with variable numerical abundance and low species richness of ostracods and foraminifera. The δ18O and δ13C of the ostracod Cyprideis torosa show close similarity to the present Pleistocene coastal aquifer isotopic values. This study therefore concludes that the wetlands were shallow-water bodies fed by groundwater, with no evidence of sea-water mixing. It seems that they developed as the result of high groundwater levels, transportation of sediments landward, and deposition of sand bars at the paleo-river mouths. It is still not fully understood why these wetlands deteriorated abruptly and disappeared within less than 1000 yr.