The tetrapeptide (Bz-ΔPhe(p-NPh2)-l-DOPA(protected)-l-Phe-l-Phe-OMe was designed to incorporate seven phenyl rings so that it’s conformation, self-assembly and application in Hg2+ ions sensing could be studied. Peptide molecules adopted an overlapping β-turn of type III/III conformation in crystals. The peptide showed a highly selective turn-on response towards mercuric ion over other metal ions with a 10-fold enhancement in fluorescence intensity. This intensity change coupled with the selectivity of the peptide towards mercury allowed us to demonstrate simple colorimetric dip sensing of Hg2+ ions. The technique provides a highly selective and effective way to detect Hg2+ ions. The peptide also self-assembled into nanospheres with diameter ranges from 100 to 500 nm. Mercuric ion coordination enabled these peptide nanospheres to aggregate into well-defined nanoparticles. The enhanced fluorescence upon Hg2+ addition demonstrates that peptide scaffolds can be exploited in the development of different selective sensors.