Semiconductor quantum dots (QDs) are light-emitting particles on the nanometer scale that have emerged as a new class of fluorescent labels for chemical analysis, molecular imaging, and biomedical diagnostics. Compared with traditional fluorescent probes, QDs have unique optical and electronic properties such as size-tunable light emission, narrow and symmetric emission spectra, and broad absorption spectra that enable the simultaneous excitation of multiple fluorescence colors. QDs are also considerably brighter and more resistant to photobleaching than are organic dyes and fluorescent proteins. These properties are well suited for dynamic imaging at the single-molecule level and for multiplexed biomedical diagnostics at ultrahigh sensitivity. Here, we discuss the fundamental properties of QDs; the development of next-generation QDs; and their applications in bioanalytical chemistry, dynamic cellular imaging, and medical diagnostics. For in vivo and clinical imaging, the potential toxicity of QDs remains a major concern. However, the toxic nature of cadmium-containing QDs is no longer a factor for in vitro diagnostics, so the use of multicolor QDs for molecular diagnostics and pathology is probably the most important and clinically relevant application for semiconductor QDs in the immediate future.