A mercury sensor (N-(rhodamine-6G)lactam-ethylenediamine-4-dimethylamino-cinnamaldehyde—RLED) based on the Hg2+-promoted hydrolysis reaction has been designed and developed with a combination of theoretical calculations and experimental investigations. The interaction between RLED and Hg2+ goes through a fast-initial stage with formation of a 1:1 complex, followed by a slow hydrolysis process. The formation of durable intermediate complexes is due to quite a long hydrolysis reaction time. As a result, RLED can selectively detect Hg2+ in the presence of other metal ions, with a detection limit of 0.08 μM for the colorimetric method, and of 0.008 μM with the fluorescent method. In addition, the RLED sensor can work in a solution with a small amount of organic solvent, with a wide pH range from 5 to 10. The time-dependent density functional theory has been used for investigations of the excitation and de-excitation processes in RLED, intermediate complexes, and reaction products, thereby clarifying the changes in the fluorescence intensity before and after the RLED interacts with Hg2+ ions.