The gamma-radiolytic reduction of Hg2+ in aqueous solution in the presence of 0.3 M 2-propanol first leads to Hg-2(2+) (epsilon(232) (nm) = 3.2 x 10(4) M-1 cm(-1)), and later to colloidal mercury. When the reduction is carried out in the presence of colloidal gold nanoparticles, Hg-2(2+) does not appear as an intermediate, and Hg-2(2+) formed in the absence of gold does not react with added gold colloid. These effects are understood in terms of the reaction of a precursor, Hg+, with the gold particles. The optical absorption spectra of the resulting mercury containing gold particles are reported for various Au/Hg ratios. The plasmon absorption band of gold is blue-shifted and damped, and a broad absorption band develops around 360 nm with increasing mercury content. The mercury of the composite particles is slowly reoxidized upon exposure of the solution to air. Excess Hg2+ ions in solution extract adsorbed mercury in the form of Hg-2(2+). Both the absorption spectra and electron micrographs of the gold particles are interpreted by a rather weak penetration of mercury into the particles and formation of a rather labile mercury layer around them.