Magma emplacement in the top unconsolidated sediments of rift basins is poorly understood. We compare two shallow sills from the Guaymas Basin (Gulf of California) using core data and analyses from IODP Expedition 385, and high-resolution 2D seismic data. We show that magma stalling in the top uncemented sediment layer is controlled by the transition from siliceous claystone to uncemented silica-rich sediment, favoring flat sill formation. Space is created through a combination of viscous indentation, magma-sediment mingling and fluidization processes. We show that sills emplace above the opal-A/CT diagenetic barrier. Our model suggests that in low magma input regions sills emplace at constant depth from the seafloor, while high magma input leads to upward stacking of sills, culminating in a funnel-shaped intrusions. Our petrophysical, petrographic, and textural analyses show that magma-sediment mingling creates significant porosity (up to 20%) through thermal cracking of the assimilated sediment. Stable isotope data suggest carbonate formation at 70–90°C, consistent with background geothermal gradient at 250–325 m depth. The unconsolidated, water-rich host sediments produce little thermogenic gas through contact metamorphism, but deep diagenetically formed gas bypasses the low-permeability top sediments via hydrothermal fluids flowing through the magma plumbing system. This hydrothermal system provides a steady supply of hydrocarbons at temperatures amendable for microbial life, serving as an incubator that may be abundant in magma-rich young rift basins and play a key role in sustaining subseafloor ecosystems. Key Points Unconsolidated sediments are rheological barrier to basalt eruptions, unless frequent magmatic events outpace subsidence and sedimentation Degassing of assimilated sediment inside the magma form a high-permeability pathway for fluids ascending from depth These hydrothermal systems represent discharge areas where young rift basins dominantly degas at the seafloor Plain Language Summary Our study investigates how magma forms sills (sheet-like magma bodies) in soft, wet sediments in the Guaymas Basin, Gulf of California. We analyze core samples from an ocean drilling expedition along with seismic data. We show that when magma moves from hard, siliceous claystone to softer, uncemented silica-rich sediment, it stops ascending and spreads horizontally to form sills. Space for these sills is created by a combination of magma fluidizing host sediment and mingling with it. In areas with low magma supply, sills consistently form at a specific depth, just above the boundary between hard and soft sediments. In areas with more frequent magma supply, multiple sills stack up, eventually forming a funnel-shaped sill near the seafloor. We also show that when the magma mixes with the host sediments upon emplacement, it creates significant porosity (vesicles) that nucleates from thermogenic gas liberated by thermal cracking of the organic-rich sediment. This porosity translates into high permeability, allowing hydrothermal fluids to flow through carrying heat and gases from deeply buried sediments. These conditions create stable hydrothermal systems with moderate temperatures (<90°C) where they may play a crucial role in supporting life at and beneath the seafloor.