In this research, folic acid functionalized silver nanoparticles (FA-AgNPs) were selected as a colorimetric and a ‘turn on’ fluorescent sensor for detecting Hg2+. After being added into Hg2+, AgNPs can emit stable fluorescence at 440 nm when the excitation wavelength is selected at 275 nm. The absorbance and fluorescence of the FA-AgNPs could reflect the concentration of the Hg2+ ions. Thus, we developed a simple, sensitive analytical method to detect Hg2+ based on the colorimetric and fluorescence enhancement of FA-AgNPs. The sensor exhibits two linear response ranges between absorbance and fluorescence intensity with Hg2+ concentration, respectively. Meanwhile, a detection limit of 1 nM is estimated based on the linear relationship between responses with a concentration of Hg2+. The high specificity of Hg2+ with FA-AgNPs interactions provided the excellent selectivity towards detecting Hg2+ over other metal ions (Pb2+, Mg2+, Zn2+, Ni2+, Cu2+, Co2+, Ca2+, Mn2+, Fe2+, Cd2+, Ba2+, Cr6+ and Cr3+). This will provide a simple, effective and multifunctional colorimetric and fluorescent sensor for on-site and real-time Hg2+ ion detection. The proposed method can be applied to the analysis of trace Hg2+ in lake water. Additionally, the FA-AgNPs can be used as efficient catalyst for the reduction of 4-nitrophenol and potassium hexacyanoferrate (III).