A novel chemosensor based on unsymmetrical squaraine dye (USQ-1) for the selective detection of Hg²⁺ in aqueous media is described. USQ-1 in combination with metal ions shows dual chromogenic and “turn-on” fluorogenic response selectivity toward Hg²⁺ as compared to Li⁺, Na⁺, K⁺, Mg²⁺, Ca²⁺, Ba²⁺, Al³⁺, Cu²⁺, Cd²⁺, Mn²⁺, Fe³⁺, Ag⁺, Pb²⁺, Zn²⁺, Ni²⁺ and Co²⁺ due to the Hg²⁺-induced deaggregation of the dye molecule. A recognition mechanism based on the binding mode is proposed based on the absorption and fluorescence changes, ¹H NMR titration experiments, ESI-MS study, and theoretical calculations.