Mercuric reductase (MerA) is central to the mercury (Hg) resistance (mer) system, catalyzing the reduction of ionic Hg to volatile Hg(0). A total of 213 merA homologues were identified in sequence databases, the majority of which belonged to microbial lineages that occupy oxic environments. merA was absent among phototrophs and in lineages that inhabit anoxic environments. Phylogenetic reconstructions of MerA indicate that (i) merA originated in a thermophilic bacterium following the divergence of the Archaea and Bacteria with a subsequent acquisition in Archaea via horizontal gene transfer (HGT), (ii) HGT of merA was rare across phylum boundaries and (iii) MerA from marine bacteria formed distinct and strongly supported lineages. Collectively, these observations suggest that a combination of redox, light and salinity conditions constrain MerA to microbial lineages that occupy environments where the most oxidized and toxic form of Hg, Hg(II), predominates. Further, the taxon-specific distribution of MerA with and without a 70 amino acid N-terminal extension may reflect intracellular levels of thiols. In conclusion, MerA likely evolved following the widespread oxygenation of the biosphere in a thermal environment and its subsequent evolution has been modulated by the interactions of Hg with the intra- and extracellular environment of the organism.