A mercury resistant strain of Enterobacter sp. is reported. The strain exhibited a novel property of mercury bioaccumulation with simultaneous synthesis of mercury nanoparticles. The culture conditions viz. pH 8.0 and lower concentration of mercury promotes synthesis of uniform sized 2-5 nm, spherical and monodispersed intracellular mercury nanoparticles. The remediated mercury trapped in the form of nanoparticles is unable to vaporize back into the environment thus, overcoming the major drawback of mercury remediation process. The mercury nanoparticles were recoverable. The nanoparticles have been characterized by high resolution transmission electron microscopy, energy dispersive X-ray analysis, powder Xray diffraction and atomic force microscopy. The strain can be exploited for metal bioaccumulation from environmental effluent and developing a green process for nanoparticles biosynthesis. (C) 2010 Elsevier Ltd. All rights reserved.