The fate of mercury in the environment depends on the chemical form of mercury released and the environmental conditions. Elemental mercury, inorganic mercury, and methylmercury are the three most important forms of mercury in natural aquatic environments. Most mercury is released into the environment as inorganic mercury, which is primarily bound to particulates and organic substances and may not be available for direct uptake by aquatic organisms. The process of methylation of inorganic mercury to methylmercury, which is highly bioavailable, is thus an important key to the fate of mercury in the environment.

Elemental mercury has a high vapor pressure, a low solubility, does not combine with inorganic or organic ligands, and is not available for methylation. The mercurous ion (Hg[I]) combines with inorganic compounds only and cannot be methylated. The mercuric ion (Hg[II]) combines with both inorganic and organic ligands, and can be methylated. Methylation in aquatic habitats is primarily a biological process. Mono- and dimethylmercury are formed by microorganisms in both sediment and water through the methylation of inorganic mercuric ions (Hg[II]). Dimethylmercury, which is highly volatile, is generally not persistent in aquatic environments.

Methylation is influenced by environmental variables that affect both the availability of mercuric ions for methylation and the growth of the methylating microbial populations. Methylation rates are higher under anoxic conditions, in freshwater compared to saltwater, and in low pH environments. The presence of organic matter can stimulate growth of microbial populations (and reduce oxygen levels), thereby enhancing the formation of methylmercury. Sulfide can bind mercury and limit methylation. Methylmercury production can vary due to seasonal changes in nutrients, oxygen, temperature, and hydrodynamics. In most studies, methylation increased during the summer months when biological productivity was high, and decreased during the winter months.

Mercury is accumulated by fish, invertebrates, mammals, and aquatic plants and the concentration tends to increase with increasing trophic level (mercury biomagnifies). Although inorganic mercury is the dominant form of mercury in the environment and is easily taken up, it is also depurated relatively quickly. Methylmercury accumulates quickly, depurates very slowly, and therefore biomagnifies in higher trophic species. The percentage of methylmercury, as compared to total mercury, also increases with age in both fish and invertebrates. Due to its preferential uptake, ability to be transferred among tissues, and slow depuration, most of the mercury in fish muscle tissue (Å99%) is methylmercury.

Marine mammal tissues have some of the highest concentrations of mercury found in all marine organisms, with the liver generally having the highest total mercury concentration. Although many juvenile and adult marine mammals primarily feed on fish, which contain high percentages of methylmercury, high concentrations of inorganic mercury are found in adult specimens. Apparently, adult marine mammals can mineralize methylmercury into inorganic mercury. Juvenile marine mammals have lower concentrations of total mercury than adults; but unlike fish and invertebrates, the percentage of methylmercury is higher in juvenile mammals.

Invertebrates generally have a lower percentage of methylmercury, as compared to total mercury, in their tissues than do fish and marine mammals. The percentage of methylmercury in invertebrates varies greatly and can range from one percent in deposit-feeding polychaetes, to close to 100% in crab.

Bioconcentration factors (BCFs) reflect uptake from water in laboratory experiments. BCFs for mercury are variable, with the highest factors determined for methylmercury. BCFs for methylmercury in brook trout range from 69,000 to 630,000, depending on the tissue analyzed. BCFs for inorganic mercury (mercuric chloride) in saltwater species range from 129 for adult lobster (Homarus americanus) to 10,000 for oysters (Crassostrea virginica).

While sediment is usually the primary source of mercury in most aquatic systems, the food web is the main pathway for accumulation. High trophic level species tend to accumulate the highest concentrations of mercury, with concentrations highest in fish-eating predators. Mercury concentrations in higher trophic species often do not correlate with concentrations in environmental media. Correlations have been made between sediment and lower trophic species that typically have a high percentage of inorganic mercury, and between mercury concentrations in higher trophic species and their prey items.

Toxicity is influenced by the form of mercury, the environmental media, environmental conditions, the sensitivity or tolerance of the organism, and the life history stage. Inorganic mercury is less acutely toxic to aquatic organisms than methylmercury, but the range in sensitivity among individual species for either compound is large. Toxicity was found to be greater at elevated temperatures, lower oxygen content, reduced salinities in marine environments, and in the presence of metals such as zinc and lead.

In general, toxic effects occur because mercury binds to proteins and alters protein production or synthesis. Toxicological effects include reproductive impairment, growth inhibition, developmental abnormalities, and altered behavioral responses. Reproductive endpoints are generally more sensitive than growth or survival, with embryos and the early developmental stages the most sensitive. Mercury can be transferred from tissues of the adult female to developing eggs. Exposure to low concentrations of mercury may not result in mortality directly, but may retard growth thereby increasing the risk of predation.

Few studies report both tissue residues and effects in long-term exposure to low concentrations of mercury. However, results from studies on different freshwater species indicate that reproductive effects could be expected to occur in sensitive fish species at tissue concentrations close to the FDA action level of 1 mg/kg (ppm).

The interaction of mercury and other trace elements (e.g., cadmium, copper, selenium, and zinc) can be both antagonistic and synergistic, primarily depending on exposure concentrations and form of mercury. Effects were generally less than additive (antagonistic) at lower exposure levels and greater than additive (synergistic) at higher levels. Zinc and cadmium were reported to reduce the teratogenic effects of methylmercury to killifish while selenium reduced mercury's toxic effects on development in medaka embryos.