Foliage of terrestrial plants provides an important energy and nutrient source to aquatic ecosystems but also represents a potential source of contaminants, such as mercury (Hg). In this study, we examined how different stream water types and terrestrial tree species influenced the release of Hg from senesced litter to the water and its subsequent methylation during hypoxic litter decomposition. After laboratory incubations of maple leaf litter for 66 days, we observed 10-fold differences in dissolved Hg (DHg, < 0.45-μm) concentrations among different stream water types and more than 50-fold differences in dissolved methylmercury (DMeHg) concentrations. Percent MeHg (i.e., DMeHg x 100 / DHg on day 66) varied from 23-102% across seven natural stream water types. In general, stream waters with higher dissolved sulfate, suspended solid, and chlorophyll-a concentrations (e.g., eutrophic streams draining agricultural land) are associated with higher Hg release and methylation compared to more pristine sites (e.g., clear waters from coldwater trout stream). Across six tree species collected at the same site and incubated with the same source water, litter from slower decomposing species (e.g., cedar and pine) yielded higher DHg concentrations than those with more labile carbon (e.g., maple and birch). Percent MeHg, however, was relatively similar among different leaf species (i.e., 61-86%). Our study is the first to demonstrate that stream water chemistry and terrestrial plant litter characteristics are important factors determining Hg release and methylation during hypoxic litter decomposition. These results suggest that certain watershed and aquatic ecosystem properties can determine the levels of MeHg inputs during litterfall events.