Mercury (Hg) is a global pollutant threatening our water resources and human health. Every one of us contains some levels of Hg or methylmercury (MeHg) in our body from consumption of contaminated food such as fish and rice in some countries. Our understanding of the behavior of Hg in natural aquatic environments is limited because the key factors controlling microbial uptake and conversion of inorganic Hg to neurotoxic MeHg remain obscure. MeHg concentrations in water can bioaccumulate up to eight orders of magnitude in the food chain. Metallic or elemental Hg can evaporate and be transported around the globe, plus it readily undergoes chemical, photochemical, and biological transformations (i.e. oxidation, reduction, methylation, and demethylation) in water and sediments. Natural dissolved organic matter (DOM) plays a critical role in mediating these transformations because of its exceptionally strong binding affinity for Hg and its dual functional roles in reducing and oxidizing Hg. Recent discovery of Hg‐methylation genes has significantly advanced our understanding of MeHg biosynthesis, although the simultaneous degradation of MeHg at low concentrations (i.e. picomolar to nanomolar) by anaerobic and methanotrophic bacteria is also recognized now as a potentially important process for controlling net MeHg production, a key factor that determines Hg concentrations and bioaccumulation in biota. Treatment technologies for Hg removal from water are available, but they are mostly applicable to industrial waste streams and at contamination sites with high Hg concentrations (i.e. micromolar to millimolar). Reductions in Hg human exposure might be achievable by decreasing anthropogenic releases, such as coal combustion, over the long‐term since Hg methylation responds to Hg inputs, particularly to freshly deposited Hg in natural aquatic systems.