Background Mercury is a prominent environmental contaminant that causes detrimental effects to human health. Although the liver has been known to be a main target organ, there is limited information on in vivo molecular mechanism of mercury-induced toxicity in the liver. By using transcriptome analysis, phenotypic anchoring and validation of targeted gene expression in zebrafish, mercury-induced hepatotoxicity was investigated and a number of perturbed cellular processes were identified and compared with those captured in the in vitro human cell line studies. Results Hepato-transcriptome analysis of mercury-exposed zebrafish revealed that the earliest deregulated genes were associated with electron transport chain, mitochondrial fatty acid beta-oxidation, nuclear receptor signaling and apoptotic pathway, followed by complement system and proteasome pathway, and thereafter DNA damage, hypoxia, Wnt signaling, fatty acid synthesis, gluconeogenesis, cell cycle and motility. Comparative meta-analysis of microarray data between zebrafish liver and human HepG2 cells exposed to mercury identified some common toxicological effects of mercury-induced hepatotoxicity in both models. Histological analyses of liver from mercury-exposed fish revealed morphological changes of liver parenchyma, decreased nucleated cell count, increased lipid vesicles, glycogen and apoptotic bodies, thus providing phenotypic evidence for anchoring of the transcriptome analysis. Validation of targeted gene expression confirmed deregulated gene-pathways from enrichment analysis. Some of these genes responding to low concentrations of mercury may serve as toxicogenomic-based markers for detection and health risk assessment of environmental mercury contaminations. Conclusion Mercury-induced hepatotoxicity was triggered by oxidative stresses, intrinsic apoptotic pathway, deregulation of nuclear receptor and kinase activities including Gsk3 that deregulates Wnt signaling pathway, gluconeogenesis, and adipogenesis, leading to mitochondrial dysfunction, endocrine disruption and metabolic disorders. This study provides important mechanistic insights into mercury-induced liver toxicity in a whole-animal physiology context, which will help in understanding the syndromes caused by mercury poisoning. The molecular conservation of mercury-induced hepatotoxicity between zebrafish and human cell line reveals the feasibility of using zebrafish to model molecular toxicity in human for toxicant risk assessments.