Water-soluble CdSe quantum dots (QDs) have been synthesized with thioglycerol as a stabilizer through a novel hydrothermal route. The obtained thioglycerol capped CdSe (TG-CdSe) nanocrystals were characterized regarding their morphology and structural, thermal and optical properties. The resulting nanocrystals were synthesized in the cubic structure with a near spherical shape, as confirmed by X-ray diffraction and transmission electron microscopy. Combining transmission electron microscopy imaging and calculations using UV–visible absorption spectrum and X-ray diffraction pattern, the diameter of the synthesized nanocrystals was estimated to 2.26 nm. As confirmed by its Fourier transform IR spectrum, thioglycerol was successfully liganded on the surface of the resulting nanocrystals. Band structure parameters of the TG-CdSe nanoparticles were determined and quantum confinement effect was evidenced by optical absorption, fluorescence and Raman measurements. The thermal properties of the TG-CdSe were explored by thermal gravimetric analysis and differential scanning calorimetry. The temperature dependence of both the absorption and fluorescence spectra in the physiological range makes the TG-CdSe nanocrystals sensitive temperature markers, a property that must be taken into account when developing any probing applications, especially for cellular imaging.