We report here a new type-II core/shell quantum dot (QD) structure and a new fabrication strategy via utilization of the organometallic hot-injection route to epitaxially passivate the surface of CdSe with a nontoxic In2S3 shell layer. To minimize interfacial surface defects, six organic capping ligands namely 1-dodecanethiol, trioctylphosphine, oleic acid, hexadecylamine, oleylamine and lauric acid were anchored onto the surface of the QDs. Successful transfer of the organic-phase QDs to the water-soluble phase was carried out via a ligand exchange reaction with L-glutathione (GSH). The GSH-functionalized CdSe/In2S3 QDs exhibited improved crystallinity over the CdSe core, monodisperse particle size distribution, high colloidal stability in aqueous solution and size-tunable optical properties, which were reflected in the variation of the fluorescence quantum yield (QY) from 12 to 97%. A direct relationship between the lattice strain and fluorescence QY of the QDs indicated that within the regime of quantum confinement, the QDs were sandwiched between radiative and nonradiative emission states. The high quality optical properties and nontoxic characteristics imply that the QDs are applicable to a wide array of applications within the chemical and biological domains.