It is increasingly becoming known that mercury transport and speciation in the terrestrial environment play major roles in methyl-mercury bioaccumulation potential in surface water. This review discusses the principal biogeochemical reactions affecting the transport and speciation of mercury in the terrestrial watershed. The issues presented are mercury-ligand formation, mercury adsorption/desorption, and elemental mercury reduction and volatilization. In terrestrial environments, OH-, Cl- and S- ions have the largest influence on ligand formation. Under oxidized surface soil conditions Hg(OH)2, HgCl2, HgOH+, HgS, and Hg0 are the predominant inorganic mercury forms. In reduced environments, common mercury forms are HgSH+, HgOHSH, and HgClSH. Many of these mercury forms are further bound to organic and inorganic ligands. Mercury adsorption to mineral and organic surfaces is mainly dictated by two factors: pH and dissolved ions. An increase in Cl- concentration and a decrease in pH can, together or separately, decrease mercury adsorption. Clay and organic soils have the highest capability of adsorbing mercury. Important parameters that increase abiotic inorganic mercury reduction are availability of electron donors, low redox potential, and sunlight intensity. Primary factors that increase volatilization are soil permeability and temperature. A decrease in mercury adsorption and an increase in soil moisture will also increase volatilization. The effect of climate on biogeochemical reactions in the terrestrial watershed indicates mercury speciation and transport to receiving water will vary on a regional basis.