PEGylation of quantum dots (QDs) to decrease their toxicity, increase blood circulation time, reduce non-specific uptake and also to solubilize and stabilize hydrophobic QDs in aqueous medium is a widely used approach and many different methods were developed to achieve this. QDs that are luminescent in the near-infrared region (NIR) have recently emerged as the more appropriate materials for bio-imaging studies. In this work, we describe a single step emission tunable aqueous synthesis of PEGylated Ag2S NIRQDs. They are highly cytocompatible, not only due to the PEG coating but also due to the intrinsic biocompatibility of Ag2S, and prepared in a single step aqueous method using thiolated PEGs as the only coating material. Tuning the emission wavelength within the medical window (775-930 nm) with a quantum yield between 2 and 65% is achieved by changing the reaction variables such as PEG molecular weight, pH and precursor ratios. Ag2S-PEG NIRQDs prepared from 5 kDa MPEG-SH at acidic pH provided a dramatic enhancement in the luminescence intensity. These NIRQDs were also designed with surface functional groups to attach folic acid and loaded with doxorubicin (DOX) which dramatically enhanced the uptake and efficacy of DOX (50% cell death with 15 nM DOX) in FA-receptor overexpressed cancer cell lines (HeLa). They also showed a strong cytoplasmic NIR signal in the in vitro studies, demonstrating great theranostic potential.