•Mercury removal from water achieved through the ion exchange membrane bioreactor.•Mercury removal to levels below the 1ppb drinking water limit were achieved.•>98% removal of Hg achieved, with >98% biologically reduced from Hg(II) to Hg(0).•Higher water throughputs (>5 times) achieved after membrane pre-treatment.•Minimal contaminated waste was produced=clean environmental technology. Mercury is a highly toxic heavy metal that causes human health problems and environmental contamination. In this study, an ion exchange membrane bioreactor (IEMB) process was developed to achieve Hg(II) removal from drinking water and industrial effluents. Hg(II) transport through a cation exchange membrane was coupled with its bioreduction to Hg0 in order to achieve Hg removal from concentrated streams, with minimal production of contaminated by-products observed. This study involves (1) membrane selection, (2) demonstration of process effectiveness for removing Hg from drinking water to below the 1ppb recommended limit, and (3) process application for treatment of concentrated water streams, where >98% of the Hg was removed, and the throughput of contaminated water was optimised through membrane pre-treatment. The IEMB process represents a novel mercury treatment technology with minimal generation of contaminated waste, thereby reducing the overall environmental impact of the process.