Activated carbon (AC) amendment is considered as one of the alternatives for managing and remediating mercury (Hg) contaminated sediments because of its high sorptive capacity and potential to immobilize the contaminant. For this study, the underlying mechanisms that control the reduction of Hg bioavailability in AC-amended estuarine sediments were investigated in box microcosm set-ups with 28-day Asian clam bioassay experiments. The application of diffusive gradients in thin film technique (DGT) revealed that the total mercury and methylmercury levels in sediment pore water decreased by 60%–75% in 1%–3% AC-amended sediments. This decrease subsequently led to a linear reduction in the Hg body burden in Asian clams, even at 1% sorbent mixing. These observations implied that AC amendment reduced the net flux of Hg into the pore water and overlying water, resulting in reduced Hg bioaccumulation in benthic organisms. The addition of AC to sediment also led to reduced dissolved organic carbon and several biogeochemical indicators (HS−, Mn, and Fe) in the pore water. Furthermore, the 16 S rRNA gene amplicon sequencing analysis revealed noticeable alterations in the microbial communities after AC amendment. The predominant phylum was Firmicutes in control sediment, Bacteroidetes in 1% AC-amended sediment, and Proteobacteria in both 2% and 3% AC-amended sediment samples. The genera-level analysis showed that the relative abundance of the Hg-methylators decreased as the level of AC amendment increased. These observations suggested that AC amendment decreased Hg bioavailability not only by physicochemical sorption but also by changing geochemical species and shifting the microbial community composition.