The sensitivity of a previously described assay (O. Selifonova, R. Burlage, and T. Barkay, Appl. Environ. Microbiol. 59:3083-3090, 1993) for the detection of bioavailable inorganic mercury (Hg2+) by the activation of a mer-lux fusion was increased from nanomolar to picomolar concentrations by reducing biomass in the assays from 10(7) to 10(5) cells ml-1. The increase in sensitivity was due to a reduction in the number of cellular binding sites that may compete with the regulatory protein, MerR, for binding of the inducer, Hg2+. These results show that (i) the sensitivity of the mer-lux assay is sufficient for the detection of Hg2+ in most contaminated natural waters and (ii) mer-specified reactions, Hg2+ reduction and methylmercury degradation, can be induced in natural waters and may participate in the geochemical cycling of mercury.