Herein, we have developed citrate-, glutathione-, and ascorbate-functionalized gold nanoparticles (AuNPs) to examine their interactions with diverse heavy metal ions, such as Cd, Mn, Cr, Fe, Co, Pb, Hg, Zn, and Ti. These interactions are crucial in defining the final outcome of AuNP-based sensing/removal of heavy metals. We have evaluated these interactions by analyzing the variations in the color and spectroscopic signals of functionalized AuNPs. Additionally, the obtained results were also compared and validated with the computational studies. It has been observed that citrate-AuNPs and GSH-AuNPs displayed high selectivity toward Cr and Mn with E force values of −23.4 and −14.0 kJ/mol, respectively. Likewise, the ascorbate-AuNPs displayed sensitivity for multiple ions, for example, Cd, Fe, and Mn, with an E force value of −19.6 kJ/mol. A detailed analysis focusing on the electrostatic charges, ionic sizes, and interaction energy values has been provided to show specific interactions between functionalized AuNPs and heavy metal ions. The respective mechanisms of interaction between heavy metal ions and functionalized AuNPs have been explored with the help of experimental and computational outcomes.