Applications of water-soluble quantum dots (QDs) in the life sciences are limited by their poor colloidal stability in physiological media and nonspecific interaction with biomatter, particularly cell membranes. We have studied colloidal stability and nonspecific interactions with living cells for zwitterionic d-penicillamine-coated QDs (DPA-QDs) and the traditionally used carboxylated 11-mercaptoundecanoic acid-coated QDs (MUA-QDs) and found clear advantages of DPA-QDs. In single molecule fluorescence experiments, DPA-QDs showed no aggregation over the physiologically relevant pH range of 5-9, whereas MUA-QDs showed significant aggregation below pH 9. Upon exposure to living Mono Mac 6 cells, DPA-QDs, which possess overall charge-neutral surfaces, exhibited weak interactions with the cell membrane and were easily removed by flushing with buffer. By contrast, the highly charged MUA-QDs strongly associated with the cells and could not be removed even by extensive rinsing with buffer solution. DPA-QDs exhibit a high chemical stability even in strongly oxidizing conditions, in contrast to cysteine-coated QDs reported earlier. This beneficial property may arise from reduced interactions between DPA ligands due to steric effects of the methyl groups on their beta-carbon atoms.