AbstractWe present a discussion of the dipolar excitonic insulator transition believed to occur in certain expanded fluid metals, notably Hg. A mean field theory is developed which, employing ideas from continuum dielectric theory, leads to the construction of a free energy function representing the change in free energy of the system consequent upon producing a dipolar atom, and relative to the normal non‐polar insulating ground state. Analysis of this function predicts the existence of, and leads to a simple criterion for, the excitonic insulator instability. The transition to a dipolar atomic state is predicted to occur at a density where the optical absorption edge is at a finite energy. Particular attention is given to expanded fluid Hg, although fluid Li is also discussed and is concluded to be a viable candidate for an excitonic insulator transition. Consideration is also given as to whether the excitonic state of Hg is paraelectric or ferroelectric in nature.