The environmental release of mercury is continuously increasing with high degree of mobility, transformation and amplified toxicity. Improving remediation strategies is becoming increasingly important to achieve more stringent environmental safety standards. This study develops a laboratory-scale reactor for bioremediation of aqueous mercury using a biofilm-producing bacterial strain, KBH10, isolated from mercury-polluted soil. The strain was found resistant to 80 mg/L of HgCl2 and identified as Bacillus nealsonii via 16S rRNA gene sequence analysis. The strain KBH10 was characterized for optimum growth parameters and its mercury biotransformation potential was validated through mercuric reductase assay. A packed-bed column bioreactor was designed for biofilm-mediated mercury removal from artificially contaminated water and residual mercury was estimated. Strain KBH10 could grow at a range of temperature (20-50 °C) and pH (6.0-9.0) with optimum temperature established at 30 °C and pH 7.0. The optimum mercuric reductase activity (77.8 ± 1.7 U/mg) was reported at 30 °C and was stable at a temperature range of 20-50 °C. The residual mercury analysis of artificially contaminated water indicated 60.6 ± 1.5% reduction in mercury content within 5 h of exposure. This regenerative process of biofilm-mediated mercury removal in a packed-bed column bioreactor can provide new insight into its potential use in mercury bioremediation.