We report herein the development of a highly sensitive colorimetric method for the detection of 4-hydroxy-2-mercapto-6-methylpyrimidine (MTU) which acts as an anti-thyroid drug utilizing citrate capped gold nanoparticles (Au-NPs). This thiol-containing molecule exhibits intriguing affinity with Au-NPs. The reactivity involves the displacement of the citrate shell by the thiolate shell followed by intermolecular electrostatic interactions or hydrogen-bonding between the thiolate shells. The interparticle interactions depend on ionic strength, pH and Au-NPs concentration of the solution. The interparticle interactions lead to a small change in the plasmon band around 521 nm and the formation of a new red shifted band. The calibration curve is derived from the ratio of the absorption intensity changes at 650 nm to the changes at 520 nm. It was linear in the concentration range of 5.0 × 10-7-2.75 × 10-6 M. The detection limit (3σ) for MTU was found to be 1.9 × 10-7 M.