We investigated the impact of managed retreat on mercury (Hg) biogeochemistry at a site subject to diffuse contamination with Hg. We collected sediment cores from an area of land behind a dyke one year before and one year after it was intentionally breached. These sediments were compared to those of an adjacent mudflat and a salt marsh. The concentration of total mercury (THg) in the sediment doubled after the dyke was breached due to the deposition of fresh sediment that had a smaller particle size, and higher pH. The concentration of methylmercury (MeHg) was 27% lower in the sediments after the dyke was breached. We conclude that coastal flooding during managed retreat of coastal flood defences at this site has not increased the risk of Hg methylation or bioavailability during the first year. As the sediment becomes vegetated, increased activity of Hg-methylating bacteria may accelerate Hg-methylation rate. Display omitted •We collected cores behind a dyke before and after it was intentionally breached.•Mercury concentration in inundated sediment doubled after the dyke was breached.•Methylmercury concentration decreased in inundated sediment by 27% after breaching.•The freshly deposited sediment adsorbed more Hg and decreased its bioavailability.•Coastal managed retreat did not increase risk of Hg methylation during first year. Mercury concentration doubled in sediments after coastal flooding but methylmercury concentration deceased.