We have developed a new synthetic method for producing high-quality quantum dots (QDs) in aqueous solution for biological imaging applications. The glutathione-capped CdTe, ZnSe and Zn 1-x Cd x Se alloyed QDs derived are tunable in fluorescence emissions between 360 nm and 700 nm. They show high quantum yields (QYs) of up to 50%, with narrow bandwidths of 19-55 nm. The synthesis of glutathione-capped QDs is simple and cost-effective compared to the conventional organometallic approaches. It can be easily scaled up for the commercial production of alloyed nanocrystals of various compositions. We have also demonstrated the fabrication of magnetic quantum dots (MQDs) through a seed-mediated approach. The formation and assembly of these bifunctional nanocomposites have been elucidated by high-resolution transmission electron microscopy (HRTEM). The MQDs exhibit superparamagnetism and tunable emissions characteristic of the components in this hybrid system. We have created biocompatible silica-coated MQDs that effectively target the cell membranes.