As the methylation of inorganic mercury to neurotoxic methylmercury has been attributed to the activity of anaerobic bacteria, the formation of methylmercury in the oxic water column of marine ecosystems has puzzled scientists over the past years. Here we show for the first time that methylmercury can be produced in particles sinking through oxygenated water column of lakes. Total mercury and methylmercury concentrations were measured in the settling particles and in surface sediments of the largest freshwater lake in Western Europe (Lake Geneva). While total mercury concentration differences between sediments and settling particles were not significant, methylmercury concentrations were about ten-fold greater in settling particles. Methylmercury demethylation rate constants (kd) were of similar magnitude in both compartments. In contrast, mercury methylation rate constants (km) were one order of magnitude greater in settling particles. The net potential for methylmercury formation, assessed by the ratio between the two rate constants (km kd−1), was therefore up to ten fold greater in settling particles, denoting that in situ transformations likely contributed to the high methylmercury concentration found in settling particles. Mercury methylation was inhibited (∼80%) in settling particles amended with molybdate, demonstrating the prominent role of biological sulfate-reduction in the process.