Studying particle-laden oscillatory channel flow constitutes an important step towards understanding practical application. This study aims to take a step forward in our understanding of the role of turbulence on fine-particle transport in an oscillatory channel and the back effect of fine particles on turbulence modulation using an Eulerian–Eulerian framework. In particular, simulations presented in this study are selected to investigate wave-induced fine sediment transport processes in a typical coastal setting. Our modelling framework is based on a simplified two-way coupled formulation that is accurate for particles of small Stokes number (St). As a first step, the instantaneous particle velocity is calculated as the superposition of the local fluid velocity and the particle settling velocity while the higher-order particle inertia effect neglected. Correspondingly, only the modulation of carrier flow is due to particle-induced density stratification quantified by the bulk Richardson number, Ri. In this paper, we fixed the Reynolds number to be ReΔ = 1000 and varied the bulk Richardson number over a range (Ri = 0, 1 × 10−4, 3 × 10−4 and 6 × 10−4). The simulation results reveal critical processes due to different degrees of the particle–turbulence interaction. Essentially, four different regimes of particle transport for the given ReΔ are observed: (i) the regime where virtually no turbulence modulation in the case of very dilute condition, i.e. Ri ~ 0; (ii) slightly modified regime where slight turbulence attenuation is observed near the top of the oscillatory boundary layer. However, in this regime a significant change can be observed in the concentration profile with the formation of a lutocline; (iii) regime where flow laminarization occurs during the peak flow, followed by shear instability during the flow reversal. A significant reduction in the oscillatory boundary layer thickness is also observed; (iv) complete laminarization due to strong particle-induced stable density stratification.