Speciation and extraction of mercury has been studied using cloud point extraction of polyethylene glycol (PEG). A solution of PEG itself is reported to form cloud at a considerably high temperature which is unfavorable for the extraction and separation of volatile analytes. Different inorganic salt solutions (Na2SO4, NaH2PO4, NaCl, NaOAc) when used as additives were found to lower the cloud point temperature of PEG (#6000) effectively. The lowest temperature for cloud formation was observed at 35 °C with 0.8 M Na2SO4. The cloud so formed was found suitable to discriminate between inorganic and organic mercury species. 1-(2-pyridylazo)-2-napthol (PAN) was used for spectrophotometric detection of inorganic and organic mercury. Confocal microscopic images and zeta potential values reveal the actual interactions of the inorganic Hg species with the organized PEG micelles in aqueous medium. Environmental samples were also analyzed using the present method. © 2016 Elsevier Ltd.