Climate warming accelerates permafrost degradation, which not only increases greenhouse gas emission but also the conversion of permafrost-stored mercury (Hg) to the neurotoxic methylmercury (MeHg) - a global pollutant to humans and ecosystems. While several studies have examined Hg transformation processes in high-latitude Arctic permafrost, little is known regarding the formation and distribution of MeHg in high-altitude permafrost, particularly the thermokarst lakes on the Tibetan Plateau (so-called Earth's third pole). We conducted field investigations and show an elevated MeHg concentration in thermokarst lakes and sediments, despite their relatively low total Hg (HgT) levels compared to those in the Arctic. Hg(II) methylation appears coupled with soil organic matter (SOC) degradation and microbial activity, evidenced by positive correlations between MeHg production and SOC and CH4 emission fluxes in thermokarst lakes. Laboratory anaerobic incubations with or without microbial inhibitors revealed a high methylation potential in some lake sediments. However, MeHg production and its associated microbial communities varied, with sulfate-reducing bacteria (SRB) dominating in one of the lake sediments studied, whereas syntrophs and methanogens contributed ∼57 % to Hg(II) methylation along with 43 % from SRB in the other incubation. Sequencing analyses confirmed the presence of hgcA-containing SRB, such as Desulfuromonas and Desulfobulbus, Methanospirillum, and Syntrophus in these lake sediments. Additionally, geochemical conditions of lakes, such as sulfate, SOC, and N contents, showed significant influences on MeHg production. These findings suggest that some thermokarst lakes acted as Hg(II) methylation hotspots in thawing alpine permafrost and underscore the need for further research and assessment of environmental risks of MeHg in this sensitive ecosystem due to climate warming.