Though some parts of the region continue to be plagued by economic turmoil and political unrest, Europe dominated this year's best-of list with eight of the report's top 10 cities hailing from the region.
"Overall, European cities continue to have high quality of living as a result of a combination of increased stability, rising living standards and advanced city infrastructures," Slagin Parakatil, Senior Researcher at Mercer, told CNN.
New Zealand's Auckland, Canada's Vancouver and Australia's Sydney (which tied with Bern in Switzerland for 10th place) also made the report's top 10.
In the United States, Honolulu and San Francisco clinched the titles of the highest-ranking cities, coming in 28th and 29th, respectively.
According to the Mercer report, this year's ranking also separately identified the cities with the "best infrastructure." Singapore bagged the top spot for this distinction, followed by Frankfurt and Munich in second place.
On the other end of the scale, Baghdad was ranked -- among 221 cities -- the city with the lowest quality of living; while Port-au-Prince, Haiti, had the worst infrastructure.
Check out the slideshow below to find out which city Mercer finds the most livable in the world.