Mercury (Hg) contaminated paddy soils are hot spots for methylmercury (MeHg) which can enter the food chain via rice plants causing high risks for human health. Biochar can immobilize Hg and reduce plant uptake of MeHg. However, the effects of biochar on the microbial community and Hg (de)methylation under dynamic redox conditions in paddy soils are unclear. Therefore, we determined the microbial community in an Hg contaminated paddy soil non-treated and treated with rice hull biochar under controlled redox conditions (< 0 mV to 600 mV) using a biogeochemical microcosm system. Hg methylation exceeded demethylation in the biochar-treated soil. The aromatic hydrocarbon degraders Phenylobacterium and Novosphingobium provided electron donors stimulating Hg methylation. MeHg demethylation exceeded methylation in the non-treated soil and was associated with lower available organic matter. Actinobacteria were involved in MeHg demethylation and interlinked with nitrifying bacteria and nitrogen-fixing genus Hyphomicrobium. Microbial assemblages seem more important than single species in Hg transformation. For future directions, the demethylation potential of Hyphomicrobium assemblages and other nitrogen-fixing bacteria should be elucidated. Additionally, different organic matter inputs on paddy soils under constant and dynamic redox conditions could unravel the relationship between Hg (de)methylation, microbial carbon utilization and nitrogen cycling.