Mercury (Hg) is a global pollutant and can be methylated to form neurotoxic methylmercury (MeHg), which can bioaccumulate and biomagnify in food webs. In natural fresh water and sediments, Hg is largely associated with particulate minerals and organics. However, it remains unclear under what conditions these particulates may become a sink or a source for Hg, and whether the particulate-bound Hg is available for microbial uptake and methylation. In this study, we investigated Hg sorption-desorption kinetics and thermodynamics and evaluated the potential of particulate-bound Hg for microbial methylation using a Hg-contaminated soil sediment and organic-coated hematite particles in laboratory microcosms. Mercury was found to strongly and rapidly sorb onto particulates, especially the cysteine-coated hematite and the soil sediment. Hg desorption from particulates was low (0–4%). However, the presence of Hg-binding ligands, such as low-molecular-weight thiols and humic acid, caused up to 60% of Hg desorption from the Hg-laden hematite particles, but < 6% from the sediment. Interestingly, the particulate-bound Hg was found to be bioavailable for uptake and methylation by a sulfate-reducing bacterium, Desulfovibrio desulfuricans ND132, and the methylation rate was 4–10 times higher than the desorption rate of Hg under anaerobic incubations. These results suggest direct interactions between bacterial cells and the particulate-bound Hg, resulting in rapid exchange and/or uptake of Hg by the bacteria. The present study thus highlights the importance of Hg partitioning at particulate-water interfaces and the role of particulate-associated Hg as a significant source for microbial methylation in the environment.