Seepage from Hg mine wastes and calcines contains high concentrations of mercury (Hg). Hg pollution is a major environmental problem in areas with abandoned mercury mines and retorting units. This study evaluates factors, especially the hydrological and sedimentary variables, governing temporal and spatial variation in levels and state of mercury in streams impacted by Hg contaminated runoff. Samples were taken during different flow regimes in the Wanshan Hg mining area in Guizhou Province, China. In its headwaters the sampled streams/rivers pass by several mine wastes and calcines with high concentration of Hg. Seepage causes serious Hg contamination to the downstream area. Concentrations of Hg in water samples showed significant seasonal variations. Periods of higher flow showed high concentrations of total Hg (THg) in water due to more particles being re-suspended and transported. The concentrations of major anions (e.g., Cl− , F− , NO3 − and SO4 2− ) were lower during higher flow due to dilution. Due to both sedimentation of particles and dilution from tributaries the concentration of THg decreased from 2100 ng/L to background levels (< 50 ng/L) within 10 km distance downstream. Sedimentation is the main reason for the fast decrease of the concentration, it accounts for 69% and 60% for higher flow and lower flow regimes respectively in the upper part of the stream. Speciation calculation of the dissolved Hg fraction (DHg) (using Visual MINTEQ) showed that Hg(OH)2 associated with dissolved organic matter is the main form of Hg in dissolved phase in surface waters in Wanshan (over 95%).