Biosensors based on microbial cells have been developed to monitor environmental pollutants. These biosensors serve as inexpensive and convenient alternatives to the conventional lab based instrumental analysis of environmental pollutants. Small monomeric naturally occurring fluorescent proteins (fp) can be exploited by converting them as small biosensing devices for biomedical and environmental applications. Moreover, they can withstand exposure to denaturants, high temperature, and a wide pH range variation. The current study employs newly identified novel fluorescent protein HriGFP from Hydnophora rigida to detect environmental contaminants like heavy metals and organo-phosphorous (pesticide) compounds such as methyl parathion. The HriGFP was initially tested or its expression in bacterial systems (Gram positive and Gram negative) and later on for its biosensing capability in E coli (BL21DE3) for detection of heavy metals and methyl parathion was evaluated. Our results indicated the discrete and stable expression of HriGFP and a profound fluorescent quenching were observed in the presence of heavy metals (Hg, Cu, As) and methyl parathion. Structural analysis revealed heavy metal ions binding to HriGFP via amino acid residues. In-silico-analysis further revealed strong interaction via hydrogen bonds between methyl parathion phosphate oxygen atoms and the amino group of Arg119 of HriGFP. This study implies that HriGFP can act as a biosensor for detecting harmful carcinogenic pesticide like methyl parathion in water resources in the vicinity of heavily pesticide impregnated agricultural lands and heavy metal contaminated water bodies around industrial areas.