A mercury resistant bacterial strain, SA2, was isolated from soil contaminated with mercury. The 16S rRNA gene sequence of this isolate showed 99% sequence similarity to the genera Sphingobium and Sphingomonas of α-proteobacteria group. However, the isolate formed a distinct phyletic line with the genus Sphingobium suggesting the strain belongs to Sphingobium sp. Toxicity studies indicated resistance to high levels of mercury with estimated EC50 values 4.5 mg L−1 and 44.15 mg L−1 and MIC values 5.1 mg L−1 and 48.48 mg L−1 in minimal and rich media, respectively. The strain SA2 was able to volatilize mercury by producing mercuric reductase enzyme which makes it potential candidate for remediating mercury. ICP-QQQ-MS analysis of Hg supplemented culture solutions confirmed that almost 79% mercury in the culture suspension was volatilized in 6 h. A very small amount of mercury was observed to accumulate in cell pellets which was also evident according to ESEM-EDX analysis. The mercuric reductase gene merA was amplified and sequenced. The deduced amino acid sequence demonstrated sequence homology with α-proteobacteria and Ascomycota group. •First report on Sphingobium with high mercury true tolerance and volatilization.•80% of mercury is volatilized in six hours which has bioremediation potential.•The merA gene from SA2 shows homology with α-proteobacteria and Ascomycota fungi.•The mercury reductase enzyme, MerA could be employed in bioremediation process.•Bacteria grown in complex media does not reflect true tolerance to mercury.