We describe studies of nanoparticle synthesis using oligonucleotides as capping ligands. The oligonucleotides nucleate, grow, and stabilize near-infrared fluorescent, approximately uniform PbS nanocrystals in an aqueous environment. The properties of the resulting particles strongly depend upon the sequences as well as synthesis conditions. Fourier Transform infrared measurements suggest that functional groups on the nucleobases such as carbonyl and amine moieties are responsible for surface passivation, while the phosphate backbone is strained to accommodate nucleobase bonding, preventing irreversible aggregation and thereby stabilizing the colloids. Our theoretical model indicates that oligonucleotide-mediated particle growth relies on the chemical reactivity of the oligonucleotide ligands that saturate dangling bonds of growing clusters, and favorable sequences are those that have the highest surface reactivity with growing particles. The oligonucleotide template approach is facile and versatile, offering a route to produce a range of material compositions for other chalcogenide semiconductor quantum dots and metal oxide nanoparticles.