This was the very first demersal survey carried out in east coast Sabah. A total of 4 cruises, covering 40 stations were completed utilizing the trawl net of research vessel, KK MANCHONG from the 15th to 31st July 2009. The survey area was divided into three depth strata [1: 10-30 fathoms (18-55 m), 2: 20-50 fathoms (56-91 m) and 3: 50-100 fathoms (92-185 m)] and into three Sulu-Sulawesi marine ecoregions: SSME 1, SSME 2 and SSME 3. A total of 213 species with an overall average catch rate of 59.74 kghr-1 were recorded during the survey. Of this, demersal fish contributed 25.29 kghr or 42%, pelagic fish contributed 11.89 kghr-1 or 20%, while 22.56 kghr-1 or 38% was attributed to trash fish. Biomass estimates of demersal and trash fish resource was calculated using Swept Area Method. The biomass distribution in the three surveyed strata and 3 SSMEs was roughly in percentage ratios of 32: 9: 59 and 44: 28: 28 for strata 1, 2 and 3 and SSME 1, SSME 2 and SSME 3 respectively. In the estimation of Maximum Sustainable Yield (MSY) of demersal fish, the acceptable figure was a summation of the 3 SSMEs' potential yield that was 44,718 tons with the demersal fish productivity at 5.295 tonsNM-2yr-1. The exploitation rate for the combination of catchability coefficient, q=0.6 and mortality rate, M=1.66 per year at yield, Y=45,450.6 tons was at 0.58 per year, indicating over exploitation of the demersal resource in the surveyed area. Taking the precautionary approach to fisheries management, it was suggested that the present level of demersal fish resource exploitation be reduced.