Mercury tolerant bacteria Pseudarthrobacter oxydans strain MM20 and Pseudomonas frederiksbergensis strain SS18 were isolated from the tundra ecosystem of Ny-Ålesund, Svalbard, where commercial exploitation of the coal existed till 1960s. Minimum inhibitory concentration (MIC), mercury removal, mercury biosorption, and antibiotic resistance of these strains were analyzed. P. frederiksbergensis strain SS18 showed high tolerance (2.0 ppm) to mercury than P. oxydans strain MM20 (1.5 ppm). Mercury removal and biosorption studies were carried out in liquid media containing 1.0 ppm mercury. More than 90% of mercury was removed from the culture media by the selected strains. The mercury biosorption assay revealed that a part of mercury was accumulated in cell pellets and was 22 and 25% respectively for P. oxydans strain MM20 and P. frederiksbergensis strain SS18. Fourier transform infrared study revealed that alkyl halide, alkynes, alcoholic, aliphatic and aromatic amines, alkanes, nitro compound, primary amines, carboxylic acid, alkenes, and amide groups play a major role in the development of tolerance towards mercury. Out of eleven antibiotics tested, P. oxydans strain MM20 was found to be resistant to lincomycin and novobiocin while P. frederiksbergensis strain SS18 was found to be resistant to seven antibiotics. Our study demonstrates that under experimental conditions, bacterial isolates undergo detailed structural and functional changes to tolerate as well as immobilize toxic elements like mercury.