The extent of mercury (Hg) toxicity in the heterocystous cyanobacterium Nostoc muscorum grown for 72 h in three different light intensities was tested for various physiological parameters viz. growth, pigment contents, photosynthesis, respiration, reactive oxygen species (ROS), malondialdehyde formation and antioxidants. A general reduction in growth and pigments, whole cell O₂- evolution, photosynthetic electron transport activities and ¹⁴CO₂-fixation was observed in a metal concentration–dependent manner, and this effect was more pronounced in high light (130 µmol photon m⁻² s⁻¹)–exposed cells as compared to low (10 µmol photon m⁻² s⁻¹) and normal (70 µmol photon m⁻² s⁻¹) light intensity–exposed cells; however, carotenoids and respiration showed reverse trend. Among photosynthetic electron transport activities, whole chain activity was found to be most sensitive in comparison with photosystem II (PS II) and photosystem I (PS I). Comparing the different photosynthetic processes, ¹⁴CO₂-fixation was most affected in cyanobacterial cells when exposed to Hg and different light intensities. After application of various exogenous electron donors, diphenyl carbazide was found to be more effective to restore PS II activity, suggesting that site of damage lies in between oxygen evolving complex and PS II. Level of oxidative stress (superoxide radical and lipid peroxidation) was maximum at 3.0 µM of Hg when coupled with high light intensity (except hydrogen peroxide). A dose-dependent increase in enzymatic antioxidants such as superoxide dismutase, peroxidase and catalase as well as non-enzymatic antioxidants such as proline, ascorbate, cysteine (except under high light intensity) and non-protein thiols [NP-SH] was observed, which further increased with the increase in light intensity. It was noticed that Hg intoxicates N. muscorum through ROS production, which is aggravated along with the increase in light intensity. Overall results suggest that the severity of the metal stress does increase with Hg concentrations but when coupled with light, it was the light intensity that determines the extent of Hg toxicity.