CdSe nanoparticles were synthesized by using colloidal methods at room temperature. Nanoparticle size was controlled by the amount of stabilizer, pH, and stabilizer type and was characterized by TEM and XRD. All the synthesized CdSe nanoparticles showed the quantum confinement effect. With increased amounts of mercaptoacetic acid as a stabilizer, the size of nanoparticles decreased. The UV-VIS absorption and photoluminescence (PL) properties could also be tailored by controlling particle size. The solubility in organic solvent and the PL characteristics were enhanced through surface capping by an organic passivator.