Pockmarks are morphological depressions commonly observed in ocean and lake floors. Pockmarks form by fluid (typically gas) seepage thorough a sealing sedimentary layer, deforming and breaching the layer. The seepage‐induced sediment deformation mechanisms, and their links to the resulting pockmarks morphology, are not well understood. To bridge this gap, we conduct laboratory experiments in which gas seeps through a granular (sand) reservoir, overlaid by a (clay) seal, both submerged under water. We find that gas rises through the reservoir and accumulates at the seal base. Once sufficient gas over‐pressure is achieved, gas deforms the seal, and finally escapes via either: (a) doming of the seal followed by dome breaching via fracturing; (b) brittle faulting, delineating a plug, which is lifted by the gas seeping through the bounding faults; or (c) plastic deformation by bubbles ascending through the seal. The preferred mechanism is found to depend on the seal thickness and stiffness: in stiff seals, a transition from doming and fracturing to brittle faulting occurs as the thickness increases, whereas bubble rise is preferred in the most compliant, thickest seals. Seepage can also occur by mixed modes, such as bubbles rising in faults. Repeated seepage events suspend the sediment at the surface and create pockmarks. We present a quantitative analysis that explains the tendency for the various modes of deformation observed experimentally. Finally, we connect simple theoretical arguments with field observations, highlighting similarities and differences that bound the applicability of laboratory experiments to natural pockmarks.