Water-soluble indium phosphide nanocrystals capped with mercaptoacetic acid were synthesized. The nanocrystals fluoresce in the near-infrared region with maximum excitation and emission wavelengths at 750 and 826nm, respectively. The fluorescence intensity is significantly enhanced in the presence of Hg2+ ions. Under the optimum conditions, the fluorescence enhancement is in proportional to the concentration of Hg (2+).