Microbial methylation and demethylation are two competing processes controlling the net production and bioaccumulation of neurotoxic methylmercury (MeHg) in natural ecosystems. Although mercury (Hg) methylation by anaerobic microorganisms and demethylation by aerobic Hg-resistant bacteria have both been extensively studied, little attention has been given to MeHg degradation by anaerobic bacteria, particularly the iron-reducing bacterium Geobacter bemidjiensis Bem. Here we report, for the first time, that the strain G. bemidjiensis Bem can mediate a suite of Hg transformations, including Hg(II) reduction, Hg(0) oxidation, MeHg production and degradation under anoxic conditions. Results suggest that G. bemidjiensis utilizes a reductive demethylation pathway to degrade MeHg, with elemental Hg(0) as the major reaction product, possibly due to the presence of genes encoding homologues of an organomercurial lyase (MerB) and a mercuric reductase (MerA). In addition, the cells can strongly sorb Hg(II) and MeHg, reduce or oxidize Hg, resulting in both time and concentration-dependent Hg species transformations. Moderate concentrations (10-500 μM) of Hg-binding ligands such as cysteine enhance Hg(II) methylation but inhibit MeHg degradation. These findings indicate a cycle of Hg methylation and demethylation among anaerobic bacteria, thereby influencing net MeHg production in anoxic water and sediments.