Mercury is the only liquid metal in the global biogeochemical cycles. Since American scholar Smith first reported higher mercury concentrations in the muscle tissue of fish from reservoirs than in adjacent natural lakes in the USA, the risk of increased mercury levels in fish became a major issue in the assessment of an environmental impact of newly constructed reservoirs. Increased mercury concentrations in abiotic and biotic components of a reservoir ecosystem were reported in different countries, such as Canada, USA, Finland, Thailand, and Brazil. On the basis of the review of a series of field studies, it appears that the mercury methylation rate in an aquatic ecosystem changes after impoundment of the reservoir. Reservoir formation affects mercury bioaccumulation in fish, in benthic organisms, and plankton in the food web. Mercury bioaccumulation, migration, and transformation in a reservoir ecosystem are mainly related to the decomposition process in the flooded soil and vegetation directly or indirectly. After reservoir formation, total mercury concentrations, methylmercury concentrations, and the ratio of methylmercury to total mercury in the components of the food web of an aquatic ecosystem vary widely. After impoundment of the reservoir, methylmercury concentrations and the ratio of methylmercury to total mercury increase significantly while total mercury varies slightly in water. Total mercury concentrations increase while methylmercury concentrations and the ratio of methylmercury to total mercury increase more strongly in plankton (especially zooplankton). Similar results were also reported for benthic aquatic insects. Because fish are at the top of the food chain, the ratio of methylmercury to total mercury in fish has generally been above 80%. After reservoir formation, total mercury and methylmercury concentrations increase while the ratio of methylmercury to total mercury shows little or no change in fish. These results are indicative of two possible pathways of accumulation of methylmercury in the food web after reservoir formation. One is the plankton food web. Methylmercury bioaccumulates up from the suspended particulate matter, phytoplankton to zooplankton, and methylmercury concentrations and the ratio of methylmercury to total mercury increase. The other pathway is the benthic food web. Methylmercury bioaccumulates up from suspended particulate matter, from bacterial and detrivorous benthic aquatic insects to carnivorous benthic aquatic insects, whereas methylmercury concentration and the ratio of methylmercury to total mercury increase. Through these two pathways, methylmercury and the ratio of methylmercury to total mercury increase significantly in predatory fish that eat aquatic insects, small fish, and crustacean plankton. Mercury methylation in an aquatic ecosystem accelerates after reservoir formation. The balance of mercury methylation and demethylation changes and is affected by flooded soil and vegetation directly and indirectly. Methylmercury is released directly into a reservoir ecosystem during the process of microbial degradation of a flooded soil and vegetation. An anaerobic environment is formed via the degradation of the flooded soil and vegetation at the bottom of the water column of the reservoir. This process helps to dissolve inorganic mercury from the flooded soil and vegetation. The increased level of inorganic mercury is ready for methylation. Meanwhile, nutrients from the degradation serve as a food resource for microorganisms. Sulfate-reducing bacteria reproduce massively and contribute to methylation of inorganic mercury. In China, there is a need for more research on bioaccumulation and risk assessment of mercury in the food web of newly constructed reservoirs.