This paper presents the first controlled‐source electromagnetic survey carried out in the German North Sea with a recently developed seafloor‐towed electrical dipole–dipole system, i.e., HYDRA II. Controlled‐source electromagnetic data are measured, processed, and inverted in the time domain to estimate an electrical resistivity model of the sub‐seafloor. The controlled‐source electromagnetic survey targeted a shallow, phase‐reversed, seismic reflector, which potentially indicates free gas. To compare the resistivity model to reflection seismic data and draw a combined interpretation, we apply a trans‐dimensional Bayesian inversion that estimates model parameters and uncertainties, and samples probabilistically over the number of layers of the resistivity model. The controlled‐source electromagnetic data errors show time‐varying correlations, and we therefore apply a non‐Toeplitz data covariance matrix in the inversion that is estimated from residual analysis. The geological interpretation drawn from controlled‐source electromagnetic inversion results and borehole and reflection seismic data yield resistivities of ∼1 Ωm at the seafloor, which are typical for fine‐grained marine deposits, whereas resistivities below ∼20 mbsf increase to 2–4 Ωm and can be related to a transition from fine‐grained (Holocene age) to unsorted, coarse‐grained, and compacted glacial sediments (Pleistocene age). Interface depths from controlled‐source electromagnetic inversion generally match the seismic reflector related to the contrast between the different depositional environments. Resistivities decrease again at greater depths to ∼1 Ωm with a minimum resistivity at ∼300 mbsf where a seismic reflector (that marks a major flooding surface of late Miocene age) correlates with an increased gamma‐ray count, indicating an increased amount of fine‐grained sediments. We suggest that the grain size may have a major impact on the electrical resistivity of the sediment with lower resistivities for fine‐grained sediments. Concerning the phase‐reversed seismic reflector that was targeted by the survey, controlled‐source electromagnetic inversion results yield no indication for free gas below it as resistivities are generally elevated above the reflector. We suggest that the elevated resistivities are caused by an overall decrease in porosity in the glacial sediments and that the seismic reflector could be caused by an impedance contrast at a thin low‐velocity layer. Controlled‐source electromagnetic interface depths near the reflector are quite uncertain and variable. We conclude that the seismic interface cannot be resolved with the controlled‐source electromagnetic data, but the thickness of the corresponding resistive layer follows the trend of the reflector that is inclined towards the west.