Monodispersed colloidal photoluminescent CdSe quantum dots (QDs) were synthesized via an organic approach by using cadmium oxide and elemental selenium as precursors, and long-chain fatty acids as surface ligands. The hydrocarbon chain length of the fatty acid was adjusted to investigate the effect on CdSe QDs. The fatty acid ligands with different hydrocarbon chain lengths showed an apparent effect on the nanocrystal nucleation and growth which is the key controlling the size, size distribution and crystal structure of resulting CdSe QDs. This effect was attributable to the steric hindrance of different hydrocarbon length of the fatty acids, which affected the reactivity of the monomers and nanocrystals during the nanocrystal nucleation and growth. The water-soluble CdSe QDs were obtained by encapsulating the CdSe ODs in oil phase with amphiphilic poly(styrene-co-maleic anhydride) (PSMA)-ethanolamine (EA) polymers, which made it possible for further applications of the CdSe QDs in aqueous environment such as surface functionalization for biological labeling and application in photocatalysis and photosensitization.