River management has altered the land–sea transport of water, sediments, and chemical compounds with profound impacts on the structure of continental and costal ecosystems. Understanding riverine transport across modified watersheds allow for better assessment of the influence of river management on material fluxes to coastal waters. Here, we assess the quantitative and qualitative aspects of mercury (Hg) transport across a modified watershed by diversion of Paraíba do Sul River waters into Sepetiba Bay, Brazil. We measured concentrations and speciation of Hg in water samples collected at sites within the modified watershed. These data, together with water discharge and sediment load from numerical models and measurements were used to estimate mass balances. In the Sepetiba watershed, mercury is mainly associated with suspended sediments (90%) and therefore Hg flux displayed the characteristic trend of downstream reduction due to trapping efficiency of particulate load by successive reservoirs. The mass balance suggests that the major source of mercury to Sepetiba Bay is the erosion of soil-derived particles from the drainage basin rather than mercury diverted from Paraíba do Sul River watershed.