A 10 m-thick and laterally extensive, mixed siliciclastic–carbonate heterolithic unit occurs between coastal quartz arenites (Banaganapalle Formation) and open marine outer-shelf carbonate platform (Narji Limestone) in the Mesoproterozoic Kurnool sea, India. While the dynamics of mixed siliciclastic–carbonate systems are well studied in the Phanerozoic, comparable Proterozoic examples remain poorly documented and are notably absent from the Indian subcontinent. High-resolution stratigraphic, facies, and petrographic analyses of this heterolithic unit reveal a progressive transition from outer-shelf to storm-dominated middle-to inner-shelf settings, periodically disrupted by episodic high-energy depositional events. Two distinct mixing modes are identified: (i) lithofacies to microscopic-scale strata mixing (Punctuated Mixing), linked to high-frequency sea-level oscillations, and (ii) bed-scale compositional mixing (In-Situ Mixing) of nearshore siliciclastics and subtidal carbonate mud. These findings demonstrate that repeated siliciclastic influx did not inhibit contemporaneous carbonate precipitation, documenting previously unrecognized mixed sedimentation between the Banaganapalle siliciclastics and the Narji carbonates, and advancing understanding of mixed-system dynamics in Proterozoic sedimentary rocks. The widespread occurrence of mixed heteroliths in the Kurnool sub-basin is interpreted to have formed during a phase of rapid subsidence that drove marine transgression, plausibly associated with a rise in sea-level, linked to post-Columbia breakup. Lithostratigraphically correlative heterolithic intervals in the intracratonic Bhima, Pranhita–Godavari and Kurnool basins suggest a regionally extensive, basin-wide Mesoproterozoic transgressive event across the Southern Indian Block. This heterolithic deposit may provide a key stratigraphic marker for regional correlation and yield new insights about the resilience of a Proterozoic non-skeletal carbonate factory and its interaction with episodic siliciclastic input.