Sediment-hosted stratiform sulfide (SHSS) deposits commonly contain large amounts of strategic metals, such as Tl, Hg, Cd, Ge and Ga, however, sources of these metals remain debate. Here we present new elemental and Hg isotopic data to constrain the metal sources for the Xiangquan Tl deposit (South China), a unique SHSS deposit with 250 t Tl at an average grade of 928 ppm. Stratiform pyrite orebodies are hosted in the Ordovician marine sedimentary succession of mostly limestone with minor mudstone. Pyrite, the dominant ore mineral, is rich in Hg (up to 1360 ppm). Bulk ores and pyrite separates from this deposit have significant variations of δ²⁰²Hg (−5.48 to −0.65 ‰) and Δ¹⁹⁹Hg (−0.01 to 0.36 ‰). The Δ¹⁹⁹Hg values are mostly positive, similar to those of seawater and marine sediments. Ore petrography, trace element enrichment coefficients, rare earth element patterns, Re-Os ages (478 ± 33 Ma) and S isotope compositions of pyrite indicate that Hg and other metals were derived from hydrothermal fluids venting at the seafloor. We suggest that the ore-forming fluids of the Xiangquan deposit were predominantly originated from large-scale circulation of evolved seawater, which leached Hg and Tl from the marine country rocks. These metal-rich fluids migrated upward, vented to the seafloor, and mixed with anoxic H₂S-rich seawater to precipitate Hg- and Tl-rich pyrite. Our study highlights that the combined application of Hg isotopes and trace elements could be used to trace the sources of metals in hydrothermal ore deposits such as SHSS deposits.