A new isotope-dilution liquid chromatography-tandem mass spectrometry (LC-MS/MS) method for determination of sulfur mustard (SM) has been developed using a direct chemical derivatization method by nucleophile potassium thioacetate (PTA) in aqueous solution. The reaction conditions for derivatization, such as reaction temperature, time, solvent and concentration of PTA, were optimized for high performance. Reversed phase liquid chromatography was suitable for analysis of such a PTA derivatized SM in complex environmental samples. Compared with other conventional gas chromatography or gas chromatography-mass spectrometry methods for direct detection on SM, better sensitivity and selectivity were achieved by this direct derivatization and LC-MS/MS method, where SM can be detected as low as 0.05 ng/mL in acetonitrile. The linear range was from 0.1 to 1000 ng/mL. The relative standard deviation (RSD) of the intra-day precision was less than 11.8%, and RSD of the inter-day precision was less than 12.3%. The whole procedure for both derivatization and analysis was quick and simple, and the total time was less than 1h. This established method has been successfully employed for determination of spiking samples both in water and soil. A detection limit of 0.1 ng/mL was achieved for river water, while the SM in soil sample could be detected at 0.1 ng/g.