Fluorescent semiconductor nanoparticles, or quantum dots, have become a promising platform for the engineering of biofunctional probes for a variety of biomedical applications, ranging from multicolor imaging to single‐molecule tracking to traceable drug delivery. Advances in organometallic synthesis have enabled preparation of hydrophobic quantum dots with high quantum yields and narrow size distribution, offering bright optical materials with narrow size‐tunable emission profiles. At the same time, polymer encapsulation procedures provide a simple and versatile methodology for transferring hydrophobic nanoparticles into physiologically relevant aqueous buffers. Taken together, hydrophobic nanoparticle platforms and polymer encapsulation should offer great flexibility for implementation of novel probe designs. However, the success of the encapsulation and purification depends on many factors often overlooked in the scientific literature, such as close match between nanoparticle and polymer physicochemical properties and dimensions, slow dynamics of polymer arrangement on the nanoparticle surface, and the size and charge similarity of resultant polymer‐coated quantum dots and empty byproduct polymer micelles. To make this general hydrophobic nanoparticle modification strategy accessible by a broad range of biomedical research groups, we focus on the important technical aspects of nanoparticle polymer encapsulation, purification, bioconjugation, and characterization.