During the Cryogenian-Ediacaran transition, an extremely cold climate transitioned into a warm climate which was accompanied by the worldwide precipitation of cap carbonates showing striking negative carbonate carbon isotope (δ13Ccarb) anomalies. High mercury (Hg) contents up to 180 ppb have been reported from the Doushantuo cap carbonates, but the origin of Hg anomalies and its relationship with cap carbonate precipitation remain unclear. To address these issues, we measured Hg concentrations and isotopes along with total organic carbon (TOC) content and δ13Ccarb from the basal Ediacaran carbonates at the Jiulongwan section of western Hubei Province, South China. The results show that in laterally persistent intervals, Hg spikes (as high as 77 ppb) co-occur with decrease of Δ199Hg values (as low as 0.07‰), increase of δ202Hg values (−1.47‰), and conspicuous negative δ13Ccarb shifts (as low as ca. -17‰). Such Hg isotopic signature with high Hg concentration are comparable to those of natural gas hydrates and thus are ascribed to be an involvement of Hg-bearing methane seeps in precipitation of cap carbonate after melting of ice-sheets of the Marinoan glaciation (latest Cryogenian). Anaerobic oxidation of methane from hydrates via sulfate reduction may have produced bicarbonate (HCO3−), which was transformed into cap carbonate when combining with alkaline ions transported from continent to seawater via weathering process. This study provides the first evidence for Hg-bearing methane oxidation during cap carbonate precipitation.