  We study the environment of wet, dry, and mixed galaxy mergers at 0.75 < z <
1.2 using close pairs in the DEEP2 Galaxy Redshift Survey. We find that the
typical environment of mixed and dry merger candidates is denser than that of
wet mergers, mostly due to the color-density relation. While the galaxy
companion rate (Nc) is observed to increase with overdensity, using N-body
simulations we find that the fraction of pairs that will eventually merge
decreases with the local density, predominantly because interlopers are more
common in dense environments. After taking into account the merger probability
of pairs as a function of local density, we find only marginal environment
dependence of the fractional merger rate for wet mergers over the redshift
range we have probed. On the other hand, the fractional dry merger rate
increases rapidly with local density due to the increased population of red
galaxies in dense environments. We also find that the environment distribution
of K+A galaxies is similar to that of wet mergers alone and of wet+mixed
mergers, suggesting a possible connection between K+A galaxies and wet and/or
wet+mixed mergers. We conclude that, as early as z ~ 1, high-density regions
are the preferred environment in which dry mergers occur, and that present-day
red-sequence galaxies in overdense environments have, on average, undergone
1.2+-0.3 dry mergers since this time, accounting for (38+-10)% of their mass
accretion in the last 8 billion years. Our findings suggest that dry mergers
are crucial in the mass-assembly of massive red galaxies in dense environments,
such as Brightest Cluster Galaxies (BCGs) in galaxy groups and clusters.
