Water-soluble, stable fluorescent PEGylated alkanethiol-coated quantum dots are made by contacting quantum dots with PEGylated alkanethiol in a non-oxidative, water-immiscible organic reaction solvent under a non-oxidative gas, wherein the reaction solvent is in contact with an aqueous phase, at elevated temperature and time sufficient to coat the dots with the PEGylated alkanethiol, wherein resultant water-soluble, stable fluorescent PEGylated alkanethiol-coated dots enter the aqueous phase.