Haifa Bay (HB), located along the northern Mediterranean shore of Israel was polluted with Hg from a chlor-alkali plant (ECI) and from the Qishon River industries, for decades. From the mid-1980s industrial Hg loads into HB decreased dramatically until their complete cessation in 2000. Consequently, concentrations in marine biota and sediments decreased almost to reference levels. However, during 2006–2014, an unexpected increase of total Hg (THg) concentrations was observed in three commercial fish species collected at northern HB (N.HB). To determine the cause of this increase, THg and methyl Hg (MeHg) were measured in seawater, coastal groundwater, suspended particulate matter, plankton, macroalgae, benthic fauna, and in marine and beach sediments. THg in groundwater and sediments from the vicinity of ECI were extremely high (up to 251 μg L−1 and 2200 ng g−1, respectively). MeHg concentrations in groundwater were low and constituted <0.1% of THg, except in the surf zone opposite the ECI, where MeHg constituted 0.2% of the THg. THg and MeHg concentrations were consistently higher in benthic biota and plankton from N.HB and northwards, compared to corresponding samples from southern HB (S.HB) and the reference site (RS). MeHg in bivalves and sponges from N.HB and SZ was higher than from S.HB and RS, despite having similar THg concentrations, which suggests a stronger source of MeHg in N.HB. Our findings suggest that the discharge into N.HB of Hg polluted groundwater under the ECI increased during the period 2006–2014. The Hg was assimilated by plankton or adsorbed onto inorganic particles, which were further ingested by benthic and pelagic consumers, as well as transported northward with the alongshore current. These findings demonstrate for the first time the potential of relic pollution in groundwater to increase heavy metal burdens in local marine food webs.