The invention relates to an environmentally-compatible process for the batchwise or continuous removal of toxic heavy metals from an aqueous effluent such as power plant wastewater. It includes the steps of activation, treating and separation. In the first step, iron in particulate form is contacted with an oxygen-containing gas such as air and an aqueous medium such as the wastewater itself under conditions providing an oxygen-water-iron interface for a period sufficient to react at least a substantial portion of the exposed iron surfaces with the oxygen and water so as to produce active surfaces on the iron particles having enhanced adsorption for the heavy metals. In the second step, without allowing the active adsorptive surfaces to dry, the particles are inundated with the aqueous effluent so as to bring about intimate contact of the aqueous effluent and adsorptive surfaces to effect adsorption of at least a substantial portion of the heavy metals on to the adsorptive surfaces. In the third step, the contacted aqueous effluent having reduced amounts of heavy metal is separated from the iron particles having heavy metals adsorbed thereon. These iron particles may then be charged to an iron or steelmaking process.