We developed a new peptide, natural phytochelatin (PC), which tightly binds to CdSe/ZnS quantum dots' (QDs) surfaces and renders them water-soluble. Coating QDs with this flexible and all-hydrophilic peptide offers high colloidal stability, adds only 0.8-0.9 nm to the radius of the particles (as compared to their original inorganic radius), preserves very high quantum yield (QY) in water, and affords facile bioconjugation with various functional groups. We demonstrate specific targeting (with minimal nonspecific binding) of such fluorescein-conjugated QDs to ScFv-fused mouse prion protein expressed in live N2A cells. We also demonstrated homogeneous in vivo biodistribution with no significant toxicity in live zebrafish.