Methylmercury (MeHg) bioaccumulation in marine food webs poses risks to fish-consuming populations and wildlife. Here we develop and test an estuarine mercury cycling model for a coastal embayment of the Bay of Fundy, Canada. Mass budget calculations reveal that MeHg fluxes into sediments from settling solids exceed losses from sediment-to-water diffusion and resuspension. Although measured methylation rates in benthic sediments are high, rapid demethylation results in negligible net in situ production of MeHg. These results suggest that inflowing fluvial and tidal waters, rather than coastal sediments, are the dominant MeHg sources for pelagic marine food webs in this region. Model simulations show water column MeHg concentrations peaked in the 1960s and declined by almost 40% by the year 2000. Water column MeHg concentrations respond rapidly to changes in mercury inputs, reaching 95% of steady state in approximately 2 months. Thus, MeHg concentrations in pelagic organisms can be expected to respond rapidly to mercury loading reductions achieved through regulatory controls. In contrast MeHg concentrations in sediments have steadily increased since the onset of industrialization despite recent decreases in total mercury loading. Benthic food web MeHg concentrations are likely to continue to increase over the next several decades at present-day mercury emissions levels because the deep active sediment layer in this system contains a large amount of legacy mercury and requires hundreds of years to reach steady state with inputs.