Filtered total mercury (FTHg) concentrations in a rapidly urbanizing area ranged from 50 to 250 ng/L in surface waters of the Squankum Branch, a tributary to a major river (Great Egg Harbor River (GEHR)) traversing both urban and forested/wetland areas in the Coastal Plain of New Jersey. An unsewered residential area with Hg-contaminated well water (one of many in the region) is adjacent to the stream’s left bank. Although the region’s groundwater contains total Hg (THg) at background levels of <10 ng/L, water from about 700 domestic wells in urbanized areas completed in the acidic, quartzose unconfined aquifer typically at depths 20 to 30 m below land surface has been found to exceed 2,000 ng/L (the USEPA maximum contaminant level). Within urbanized areas, THg concentrations in shallow groundwater (<20 m below land surface at or near the water table) and the potential for Hg transport were not well known, representing a considerable knowledge gap. Sampling of streamwater in, and groundwater discharge to, the Squankum Branch watershed revealed that concentrations of THg generally were in the range of 1 to 10 ng/L, but narrow plumes (“plumelets”) of shallow groundwater discharging to the stream from the opposing banks contained FTHg at a concentration > 5,000 ng/L (left bank) and nearly 2,000 ng/L (right bank). The Hg content of bankside soils and sediments was high (up to 12 mg/kg) and mostly acid leachable where groundwater with high Hg concentrations discharged, indicating contributions of Hg by both runoff and shallow groundwater. Elevated concentrations of nutrients and chloride in some groundwater plumelets likely indicated inputs from septic-system effluent and (or) fertilizer applications. The Hg probably derives mainly from mercurial pesticide applications to the former agricultural land being urbanized. The study results show that soil disturbance and introduction of anthropogenic substances can mobilize Hg from soils to shallow groundwater and the Hg contamination travels in narrow plumelets to discharge points such as stream tributaries. In the entire GEHR watershed, THg concentrations in groundwater discharging to streams in urban areas tended to be higher than concentrations in water discharging to streams of forested areas, consistent with the results from this small watershed. Other areas with similar quartzose coastal aquifers, land-use history, and hydrogeology may be similarly vulnerable to Hg contamination of shallow groundwater and associated surface water.