An existing plume‐in‐grid model for ozone and particulate matter, which provides an explicit treatment of stack plumes embedded within a three‐dimensional grid‐based Eulerian air quality model, is extended to include a comprehensive treatment of mercury (Hg) processes. The model is applied to the continental United States to investigate the subgrid‐scale effects associated with Hg emissions from large elevated point sources on atmospheric Hg concentrations and deposition. The top thirty Hg‐emitting power plants in the U.S. were selected for explicit plume‐in‐grid treatment. Two new processes are included in the Hg chemical mechanism: the gas‐phase adsorption of reactive gaseous mercury (RGM) on atmospheric particulate matter and the reduction of RGM to elemental Hg by sulfur dioxide. The plume‐in‐grid treatment results in improved performance for Hg wet deposition over a purely Eulerian grid‐based model, partial correction of overpredictions of wet deposition downwind of coal‐fired power plants in the northeastern U.S., and decreases of approximately 10% in simulated dry and wet deposition over large parts of the eastern U.S., with larger decreases near the plants selected for plume‐in‐grid treatment. On average, 23% of ambient RGM is modeled to adsorb on atmospheric particulate matter.