Fluid mud (FM) is a unique sedimentary feature in high-turbidity estuaries, where it can make a rapid contribution to morphodynamics. Insufficient field measurements and fixed-point monitoring lead to deficient understandings of the formation, transport, and breakdown of the FM under extreme weather conditions. A field survey was conducted in the Changjiang Estuary during the period of turbidity maximum, just after Typhoon Haikui. The measurements captured the formation of the FM beneath the suspended layers, particularly around the lower reach of the North Passage. The thickness of the observed FM gradually decreased landward along the channel, with the maximum value reaching ~0.9 m. The major features of the observed storm-induced FM were simulated using the Finite-Volume Community Ocean Model. The results indicated that the initial appearance of the FM was the result of a typhoon-intensified, salinity-induced stratification in the outlet region. The subsequent landward propagation of the FM was driven by the combined effects of the FM-induced mud surface pressure gradient force and saltwater intrusion near the bottom. Weak mixing during the subsequent neap tidal period sustained the FM as it rapidly extended into the middle region of the North Passage. This produced a large velocity shear at the interface of the FM and upper suspension layer, increasing the entrainment from the FM to the upper suspension layer. As a result of the increased tidal mixing, the FM weakened and then finally broke down in the subsequent spring tidal period.