Mugil cephalus juveniles of size 2.5 ±0.6cm were exposed to mercury in short term chronic toxicity test through static renewal bioassay to detect the possible biochemical agent as biomarkers in aquatic pollution and in estuarine contamination as specific. Lipid peroxidation levels, glutathione S-transferase, catalase, reduced glutathione and acetylcholinesterase were studied as biochemical parameters. Increased thio-barbituric acid reactive substances levels were observed under exposure to mercury, leading to the oxidative damage resulting in lipid peroxidation. Decreased activities of antioxidants, catalase and increased glutathione-S-transferase under short term chronic exposures to mercury were more prominent in metal stress suggesting activation of physiological mechanism to scavenge the ROS produced. Decreased values of reduced glutathione on prolonged exposures to mercury indicate utilization of this antioxidant, either to scavenge oxy-radical or act in combination with other enzymes. The acetylcholinesterase activity was found to be decreased during mercury exposure. The results also suggest that mercury alters the active oxygen metabolism by modulating antioxidant enzyme activities, which can be used as biomarker to detect sub-lethal effects in aquatic pollution.