Methylmercury (CH3Hg+) is a potent neurotoxin produced by certain anaerobic microorganisms in natural environments. Although numerous studies have characterized the basis of mercury (Hg) methylation, no studies have examined CH3Hg+ degradation by methanotrophs, despite their ubiquitous presence in the environment. We report that some methanotrophs, such as Methylosinus trichosporium OB3b, can take up and degrade CH3Hg+ rapidly, whereas others, such as Methylococcus capsulatus Bath, can take up but not degrade CH3Hg+. Demethylation by M. trichosporium OB3b increases with increasing CH3Hg+ concentrations but was abolished in mutants deficient in the synthesis of methanobactin, a metal-binding compound used by some methanotrophs, such as M. trichosporium OB3b. Furthermore, addition of methanol (>5 mM) as a competing one-carbon (C1) substrate inhibits demethylation, suggesting that CH3Hg+ degradation by methanotrophs may involve an initial bonding of CH3Hg+ by methanobactin followed by cleavage of the C–Hg bond in CH3Hg+ by the methanol dehydrogenase. This new demethylation pathway by methanotrophs indicates possible broader involvement of C1-metabolizing aerobes in the degradation and cycling of toxic CH3Hg+ in the environment.