Water-soluble quantum dots (QDs) with high photo-luminescence quantum efficiency have shown great potentials in photonic crystals, thin-film light-emitting devices, and especially biological labels. Since QDs are bright, photo-stable and have a broad excitation spectrum but a narrow emission at wavelengths controllable by the size and the composition of the material, they allow for efficient multicolor imaging of biological samples and should be especially use-ful for fluorescence imaging in living tissues, where signals can be obscured by scattering and competing intrinsic emis-sions. QDs have become one of the most attractive areas of current research and a new kind of interdisciplinary science. Recently, valuable progress has been achieved in water-soluble QDs as fluorescent biological labels. In this paper, struc-tural and optical properties of QDs are introduced, recent developments with preparation and applications of water-soluble QDs are reviewed, especially as fluorescent probes in biology and biomedicine.