Just like the acid-catalyzed hydration of alkenes, oxymercuration–reduction is another method of converting alkenes to alcohols.

This is a two-step process. In the first oxymercuration step, the alkene reacts with mercuric acetate in a mixture of tetrahydrofuran and water to form an organo-mercury adduct. This is followed by a demercuration step, also called reduction, in which the adduct is reduced to an alcohol using sodium borohydride.

The first step in the mechanism begins with the dissociation of mercuric acetate, forming a mercuric cation and an acetate anion.

The second step involves the attack of the alkene π bond on the electrophilic cation, resulting in the formation of a bridged-mercurinium-ion intermediate. 

Unlike the acid-catalyzed hydration reaction, where the intermediate is a regular carbocation that can undergo rearrangements, the mercurinium ion is a resonance hybrid of the carbocation and the bridged structure.

Since the resonance hybrid bears a partial positive charge rather than a full charge on the more substituted carbon, it is less likely to undergo rearrangements. Instead, it undergoes a nucleophilic attack by water at the more substituted carbon, opening the three-membered ring.

Additionally, the carbon–mercury bond to the more substituted carbon is longer than the less substituted carbon, implying that the former can be broken easier, thereby favoring a regioselective attack exclusively at the more substituted position.

Next, proton transfer to another water molecule drives the oxymercuration step to completion, producing an organo-mercury compound.

The oxymercuration of an alkene is stereospecific, with an anti addition of a hydroxyl group on the bridged-mercurinium intermediate.

In the demercuration step, the oxymercuration adduct is treated with sodium borohydride to yield a mixture of alcohols conforming to Markovnikov's regioselectivity.

However, the demercuration step proceeds with a loss in stereospecificity, since the hydrogen that replaces mercury can add in an anti or syn fashion relative to the hydroxyl groups. The net result is the formation of a mixture of syn- and anti-addition products.