This study was aimed to develop catalytic system for the dry-based reduction of oxidized mercury ($Hg^{2+}$) to elemental mercury ($Hg^0$) which is one of the most important components comprising mercury continuous emission monitoring system (Hg-CEMS). Based on the standard potential in oxidation-reduction reaction, transition metals including Fe, Cu, Ni and Co were selected as possible candidates for catalyst proceeding spontaneous reduction of $Hg^{2+}$ into $Hg^0$. These transition metal catalysts revealed high activity for reduction of $Hg^{2+}$ into $Hg^0$ in the absence of oxygen in reactant gases. However, their activities were greatly decreased in the presence of oxygen, which was attributed to the transformation of transition metals by oxygen to the corresponding transition metal oxides with less catalytic activity for the reduction of oxidized mercury. Hydrogen supplied to the reactant gases significantly enhanced $Hg^{2+}$ reduction activity even in the presence of oxygen. It might be due to occurrence of combustion reaction between $H_2$ and $O_2$ causing the consumption of $O_2$ at such high reaction temperature at which oxidized mercury reduction reaction took place. Because the system showed high activity for $Hg^{2+}$ reduction to $Hg^0$, which was compatible to that of wet-chemistry technology using $SnCl_2$ solution, the catalytic reduction system of Fe catalyst with the supply of $H_2$ could be employed as a commercial system for the reduction of oxidized mercury to elemental mercury.