The reductive biotransformation of mercuric ions to elemental mercury was studied by applying a model system with a genetically engineered Pseudomonas putida strain in a lab scale three-phase fluidized bed (TPFB). The aim was to demonstrate the suitability of the TPFB to demercurize effluent streams containing up to 10 mg Hg2+ dm(-3). The TPFB is used, first, to carry out the biotransformation on the alginate immobilized biocatalyst and, second, to remove the produced Hg0 by volatilization into the gas phase followed by its recovery through fast oxidative absorption. Targeted experiments with the immobilized biocatalyst were designed and carried out to determine mercury adsorption data on the biomass and all relevant mass transport rates at conditions prevailing in the TPFB. The evaluation of the performance data in the TPFB revealed almost complete reaction control and hence negligibility of mass transfer resistances. This simplifies the scale-up of larger TPFB reactors for mercury removal as it can be based on the known kinetics alone. The measured biotransformation capacities in the TPFB are similar to those reported for the fixed bed technology which has already proven its applicability at an industrial scale in long time runs. However, the TPFB offers some advantages over the fixed bed and could therefore possibly be a favorable, reliable, and less costly alternative to the existing technology.