Lake Velenje is located in one of the most polluted regions ofSlovenia, the Šalek Valley. The major source of pollution is the coal-fired thermal power plant in Šoštanj (ŠTPP). In the past, dumping of coal ash directly into Lake Velenje and drainage water from the ash disposal site resulted in unique chemical characteristics of the lake water, such as very high pH (10–12) and high concentrations of heavy metals. The introduction of a closed cycle ash transport system in 1995resulted in a very fast recovery of the lake water quality. The aim of our study was to establish the sources, fate and distribution of mercury in Lake Velenje. In order to establishrecent sources of mercury, total mercury and methylmercury concentrations were measured in various environmental samples(lake inflows, outflow, rainwater, sediments, etc.). Total mercury and methylmercury concentrations were measured at thesurface and at different depths to establish mercury cycling, its transport and chemical transformations in the lake. Generalwater quality parameters (such as pH, Eh, O2, temperature,TDS, conductivity) were also determined. The results show that the major sources of mercury in Lake Velenje are lake inflows and wet deposition. Total mercury andmethylmercury concentrations in the water column are very low (total mercury: 0.2–2.7 ng L-1; methylmercury: 20–86 pg L-1) and can be compared to other non-contaminated freshwater lakes. These results suggest that the major form of mercury emitted from thermal power plant stacks is volatile Hg0, whichhas no or very little influence on the nearby surroundings, but rather is subject to long-range atmospheric transport.