Concerns over possible toxicities of conventional metal-containing quantum dots have inspired growing research interests in colloidal silicon nanocrystals (SiNCs), or silicon quantum dots (SiQDs). This is related to their potential applications in a number of fields such as solar cells, optoelectronic devices and fluorescent bio-labelling agents. The past decade has seen significant progress in the understanding of fundamental physics and surface properties of silicon nanocrystals. Such understanding is based on the advances in the preparation and characterization of surface passivated colloidal silicon nanocrystals. In this critical review, we summarize recent advances in the methods of preparing high quality silicon nanocrystals and strategies for forming self-assembled monolayers (SAMs), with a focus on their bio-applications. We highlight some of the major challenges that remain, as well as lessons learnt when working with silicon nanocrystals (239 references).