Mudstone is a fine grained sedimentary rock made up of muds and clays. Grains are so fine they can only be seen with the aid of a microscope. Mudstone is formed as tiny grains of mud and clay are deposited in water and sink to the bottom. Over time the grains become buried by sediment and are slowly compacted which squeezes any water out. The particles then dry, harden and become cemented together forming the sedimentary rock known as mudstone.