Prenatal exposure to methylmercury can cause both neurobehavioral deficits and neurophysiological changes. However, evidence of neurotoxic effects within the visual nervous system is inconsistent, possibly due to incomplete statistical adjustment for beneficial nutritional factors. We evaluated the effect of prenatal methylmercury exposure on visual evoked potential (VEP) latencies in Faroese children with elevated prenatal methylmercury exposure. A cohort of 182 singleton term births was assembled in the Faroe Islands during 1994–1995. At age 7 years, VEP tracings were obtained from 139 cohort subjects after exclusion of subjects with abnormal vision conditions. We used multiple regression analysis to evaluate the association of mercury concentrations in cord blood and maternal hair at parturition with VEP latencies after adjustment for potential confounders that included the cord-serum phospholipid concentration of n-3 polyunsaturated fatty acids (PUFAs) and the duration of breastfeeding. Unadjusted correlations between mercury exposure and VEP latencies were equivocal. Multiple regression models showed that increased mercury concentrations, especially in maternal hair, were associated with delayed latencies for VEP peak N145. After covariate adjustment, a delay of 2.22 ms (p = 0.02) was seen for each doubling of the mercury concentration in maternal hair. In agreement with neuropsychological findings, the present study suggests that prenatal methylmercury exposure may have an adverse effect on VEP findings despite the absence of clinical toxicity to the visual system. However, this association was apparent only after adjustment for n-3 PUFA status.