The fate and degradation of organic matter in aquatic systems is a vital link in nutrient cycling and sedimentation processes influenced by exogenous and endogenous factors, such as inputs from upstream sources, sediment suspension, and the decomposition of aquatic organisms. The interplay of organic carbon, microbes, and environmental factors shapes the distribution and degradation of organic matter. Characterizing the source distribution of sedimentary organic matter in aquatic systems using novel proxies can unravel new insights into the mechanisms that control its dispersal, preservation and fate, which is essential to understanding the global carbon and nitrogen cycles. Therefore, the present review critically investigated amino acids as crucial markers for assessing the degradation status in lacustrine and marine sediments and highlighted the pivotal function of biotic and abiotic determinants that influence the mineralization of organic matter. The review thoroughly discussed studies on the spatio-temporal distribution patterns of amino acids and their bio-refractory nature to overcome the challenges in evaluating sediment organic matter degradation in aquatic systems. Recognizing the paramount impact of climate change on aquatic ecosystems, the review further elucidated how integrating amino acid-based data into climate models is essential for predicting complex interplay between degradation processes and evolving environmental dynamics. Finally, the specific needs for further research and recommendations for developing efficient and sustainable strategies to study organic matter degradation were highlighted. The present review will deliver fresh inferences to researchers, ecologists, and policymakers for a better understanding of source distribution and degradation status of organic matter for evidence-based conservation and management strategies.