In this study, a "green chemistry" approach was developed as an option for remediation of toxic mercury in the environment. Twenty mercury compounds were treated with an environmentally friendly agent cyclodextrin to produce stable non-toxic mercury in soil and water. The binding efficiency was determined using high performance liquid chromatography with diode-array detection. The stability of the cyclodextrin mercury complexes toward environmental microorganisms in water was estimated under OECD guidelines using gas chromatography-mass spectrometry. The toxicity of the cyclodextrin mercury compounds to terrestrial organisms was investigated by use of internationally recognized toxicity methods using mercuric acetate as a model contaminant. Key process conditions, for example pH, temperature, and amount of detoxifying agent were investigated and found to have significant effects on the toxicity of mercury. It was found that organic and inorganic mercury pollutants could be mineralized in the environment with cyclodextrins. The bound mercury compounds resisted biodegradation and were found to be non-toxic to environmental microorganisms under laboratory conditions.