Mercury methylation frequently occurs at the active oxic/anoxic boundary between the sediment bed and water column of lakes and reservoirs. Previous studies suggest that the predominant mercury methylation zone moves to the water column during periods of stratification and that high potential methylation rates (Km) in sediment require oxygenated overlying water. However, simultaneous measurements of methylmercury (MeHg) production in both the sediment and water column remain limited. Understanding the relative importance of sediment versus water column methylation and the impact of seasonal stratification on these processes has important implications for managing MeHg production. This study measured Km and potential demethylation rates (Kdm) using stable isotope tracers of unfiltered inorganic mercury and MeHg in sediments and water of the littoral and profundal zones of a shallow branch of the Nacimiento Reservoir in California's central coastal range. Field sampling was conducted once during winter (well-mixed/oxygenated conditions) and once during late summer (thermally stratified/anoxic conditions). The results showed very high ambient MeHg concentrations in hypolimnetic waters (up to 7.5 ng L−1; 79% MeHg/total Hg). During late summer, littoral sediments had higher Km (0.024 day−1) compared to profundal sediments (0.013 day−1). Anoxic water column Km were of similar magnitude to Km in the sediment (0.03 day−1). Following turnover, profundal sediment Km did not change significantly, but water column Km became insignificant. Summer and winter sediment Kdm were higher in profundal (2.35, 3.54 day−1, respectively) compared to the littoral sediments (0.52, 2.56 day−1, respectively). When modelled, Km in the water column could account for approximately 40% of the hypolimnetic MeHg. Our modelling results show that the remaining MeHg in the hypolimnion could originate from the profundal sediment. While further study is needed, these results suggest that addressing methylation in the water column and profundal sediment are of equal importance to any remediation strategy.