In this paper, a colorimetric assay for multiplexed analysis of mercury and silver ions was demonstrated by using a rationally designed unimolecular multifunctional DNA probe (UMDP) as sensing element, and unmodified gold nanoparticles (AuNPs) as color-reporting probes. The UMDP had a random coil structure that changed into two different hairpin-like structures with a T–Hg2+–T or C–Ag+–C basepairing built-in the stem upon binding Hg2+ or Ag+ ions, respectively. As a result, the conformation changes facilitated the salt-induced AuNPs aggregation, leading red-to-blue color change with a red shift of the plasmon band in the UV-visible absorption spectrum. Thus, the change in absorption intensity allowed the multiplexed detection of Hg2+ and Ag+ ions. The sensing system could detect as low as 2.5 × 10−7 M Hg2+ ions and 5 × 10−7 M Ag+ ions. Both the color and absorption changes of the system were selective for Hg2+ and Ag+ ions, which met the selective requirements for biomedical and environmental application. Moreover, the two target ions were simply distinguished by using EDTA, Hg2+ ions could not cause AuNPs aggregation while Ag+ ions still could in the presence of EDTA. Then, the colorimetric response of the two target ions in spiked lake water and tap water were tested, respectively. We expect this simple and cost-effective method to have wide-ranging applications for monitoring water quality in the developing region.