We have studied the chemical interaction of heavy metal ions such as Hg(II), Hg(I), Pb(II), and Cd(II) of various concentrations with naked and protected silver nanoparticles (Ag@citrate and Ag@MSA, respectively, where MSA is mercaptosuccinic acid). The particles were of 30 and 8 nm diameter, respectively. We observed that the metal ions interact with both the core of the nanoparticles and the functional groups of the capping agents. We study the effects of interaction using spectroscopic and microscopic techniques such as ultraviolet-visible spectroscopy (UV-vis), Fourier transform infrared spectroscopy (FTIR), X-ray diffraction (XRD), scanning electron microscopy (SEM), transmission electron microscopy (TEM), dynamic light scattering (DLS), and in detail by X-ray photoelectron spectroscopy (XPS). The Hg(II) and Hg(I) ions were reduced to metallic mercury by both of the nanoparticles, because of the feasibility of the redox reaction, whereas no reduction was observed for Cd(II) and Pb(II). The reduction of Hg(I) and Hg(II) ions was due to electrons supplied by the core silver atoms of the nanoparticles, at lower metal ion concentrations. At higher concentrations, the metal ions were chemically bonded to the carboxylate groups of the citrate and MSA. These heavy metal ions form stable sulfides. The presence of different sulfur species, such as oxidized sulfur, disulfides, and metal sulfides, was confirmed by XPS. © 2010 American Chemical Society.