A metal-enhanced fluorescence was achieved from in situ-generated Ag0 nanoparticles in the proximity of 2-hydroxy benzaldehyde (2HB). Such nanoparticles eliminated methyl blue (MB) dye from water exclusively in the presence of Zn2+ and were proven to be an efficient adsorbent for environmental remediation (maximum uptake capacity 1065 mg·g−1). Ag was zero valent in the absorbent, while Zn2+ was in Zn(OH)2 form. Fe3+ brought back MB in the aqueous medium due to the strong interaction of MB with Fe3+ and the regeneration of blue color helped to design a selective and sensitive Fe3+ sensing platform colorimetrically (linear detection range 10−4–10−6 M; linear detection limit 10−6 M). The silver nanoparticle-induced metal-enhanced fluorescence was quenched efficiently with MB. Pb2+ restored the quenched fluorescence by removing MB from the proximity of the metalized surface of silver, and Pb2+ sensing was performed fluorometrically (linear detection range; 10−5–5 × 10−8 M limit of detection 5 × 10−8 M). Iron and lead were also estimated in a variety of natural water sources, including rainfall, drinking water from taps, and water from the Ganga River via spiking method.