Mercury and its derivatives are hazardous environmental pollutants and could affect the aquatic ecosystems and human health by biomagnification. Lake sediments can provide important historical information regarding changes in pollution levels and thus trace anthropogenic or natural influences. This research investigates the 100-year history of mercury (Hg) deposition in sediments from Chao Lake, a shallow eutrophic lake in China. The results indicate that the Hg deposition history can be separated into three stages (pre-1960s, 1960s–1980s, and post-1980s) over then last 100 years. Before the 1960s, Hg concentrations in the sediment cores varied little and had no spatial difference. Since the 1960s, the concentration of Hg began to increase gradually, and showed a higher concentration of contamination in the western half of the lake region than in the eastern half of the lake region due to all kinds of centralized human-input sources. The influences of anthropogenic factors and hydrological change are revealed by analyzing correlations between Hg and heavy metals (Fe, Co, Cr, Cu, Mn, Pb, and Zn), stable carbon and nitrogen isotopes (δ13C and δ15N), nutrients, particle sizes, and meteorological factors. The results show that Hg pollution intensified after the 1960s, mainly due to hydrological change, rapid regional development and urbanization, and the proliferation of anthropogenic Hg sources. Furthermore, the temperature, wind speed, and evaporation are found to interactively influence the environmental behaviors and environmental fate of Hg.