A novel fluorescent CdS-encapsulated DNA nanocomposite was synthesized via alternate adsorption of Cd(2+) and S(2-) onto the DNA template affixed inside an agarose gel. Confining DNA molecules in the gel matrix reduces the flexibility of the DNA strand, which facilitates the formation of a uniform coating of CdS onto the DNA template. The resultant rod-shaped nanocomposite (40-90 nm in width and 200-300 nm in length) is well dispersed in solution and fluoresces at 330 nm upon excitation at either 228 or 280 nm. The fluorescence is attributed to tiny particles present in the CdS coating. It was found that the fluorescence can be significantly quenched by trace amount of Hg(2+). The high selectivity toward Hg(2+) and the apparent change in the CdS coating upon exposure to Hg(2+) indicate that Hg(2+) has reacted with the CdS coating through formation of the much more insoluble HgS and the bridging S-Hg-S bonds at the surface. The extent of quenching is dependent on the concentration of Hg(2+) in the range of 0.04-13 microM, and a remarkable detection limit (8.6 nM at 30 degrees C and 4.3 nM at 50 degrees C) can be achieved. The feasibility of the method for the analysis of Hg(2+) in a wastewater sample was demonstrated with an excellent relative standard deviation (RSD, 3.4%). The method described herein is simple, selective, and sensitive and obviates the need of extensive sample pretreatment or special instrumentation.