Naturally formed CdTe/CdS core/shell quantum dot (QD) structures in the presence of surface stabilizing agents have been synthesized by a hydrothermal method. Size and temperature dependent photoluminescence (PL) spectra have been investigated to understand the exciton-phonon interaction, and radiative and nonradiative relaxation of carriers in these QDs. The PL of these aqueous CdTe QDs (3.0-4.8 nm) has been studied in the temperature range 15-300 K. The strength of the exciton-LO-phonon coupling, as reflected in the Huang-Rhys parameter 'S' is found to increase from 1.13 to 1.51 with the QD size varying from 4.8 to 3.0 nm. The PL linewidth (FWHM) increases with increase in temperature and is found to have a maximum in the case of QDs of 3.0 nm in size, where the exciton-acoustic phonon coupling coefficient is enhanced to 51 μeV K(-1), compared to the bulk value of 0.72 μeV K(-1). To understand the nonradiative processes, which affect the relaxation of carriers, the integrated PL intensity is observed as a function of temperature. The integrated PL intensity remains constant until 50 K for relatively large QDs (3.9-4.8 nm) beyond which a thermally activated process takes over. Below 150 K, a small activation energy, 45-19 meV, is found to be responsible for the quenching of the PL. Above 150 K, the thermal escape from the dot assisted by scattering with multiple longitudinal optical (LO) phonons is the main mechanism for the fast quenching of the PL. Besides this high temperature quenching, interestingly for relatively smaller size QDs (3.4-3.0 nm), the PL intensity enhances as the temperature increases up to 90-130 K, which is attributed to the emission of carriers from interface/trap states having an activation energy in the range of 6-13 meV.