Lake Velenje is located in one of the most polluted regions of Slovenia, the Salek Valley. There are two major sources of pollution: the coal-fired thermal power plant in Sostanj (STPP) and the coal mine in Velenje. The aim of our study was to establish the sources, fate and distribution of Hg in the nearby Lake Velenje. A mass-balance model of sources, sinks and Hg transformations has been adopted based upon the work of several authors. Calculations were done by the commercially available program tool AMBER. The model is based upon Hg mass-balance calculations in water at different conditions. Simulations of Hg fluxes, mass-balances and transformations between different Hg forms in the water column show that reduction, methylation, demethylation and other processes are very important parts of the Hg cycle, even in a biologically rather unproductive lake. It can be seen that most Hg enters the lake via the Lepena inflow, where Hg is mostly bound to particulates. The next important sources of Hg are wet deposition of particulate Hg and the Sopota Stream inflow. The most important loss of Hg from the system is the settling of particulate Hg and MeHg. The second most important loss of Hg from the system is the volatilization of Hg(0). The calculated flux of Hg across the sediment-water interface is relatively low in comparison to other fluxes. Reduction and methylation of Hg(2+) was estimated to be relatively minor in comparison to other fluxes. Demethylation exceeds methylation due to the relatively low methylation constant and the low concentration of dissolved Hg(2+) in the lake. Demethylation is a process that occurs primarily in the upper layers of the lake. In our case, it was calculated for the whole water body. The simulated mass balance shows good agreement with the measured values. It can be concluded that the simulations show good agreement with the measured values for both Hg transfer fluxes and a Hg mass balance in Lake Velenje. There is a large degree of uncertainty associated with the assumed methylation and demethylation rates. It is not possible to say with confidence that these processes are of minor consequence in-situ. It can be concluded that the simulations show good agreement with the measured values for both Hg transfer fluxes and a Hg mass balance in Lake Velenje. (C) 2002 Elsevier Science Ltd. All rights reserved.