In this work, we developed biodegradable chitin nanogels (CNGs) by controlled regeneration method. For multifunctionalization, we have conjugated CNGs with MPA-capped-CdTe-QDs (QD-CNGs) for the in vitro cellular localization studies. In addition, the Bovine Serum Albumin (BSA) was loaded on to QD-CNGs (BSA-QD-CNGs). The CNGs, QD-CNGs, and BSA-QD-CNGs were well-characterized by SEM and AFM, which shows that the nanogels are in the range of <100 nm. These were further characterized by FT-IR and Cyclic Voltametry. The cytocompatibility assay showed that the nanogels are nontoxic to L929, NIH-3T3, KB, MCF-7, PC3, and VERO cells. The cell uptake studies of the QD-CNGs were analyzed, which showed retention of these nanogels inside the cells (L929, PC3, and VERO). In addition, the protein loading efficiency of the nano gels has also been analyzed. Our preliminary studies reveal that these multifunctionalized nanogels could be useful for drug delivery with simultaneous imaging and biosensing.