Herein, three different water‐soluble functional groups capped vanadium disulfide quantum dots (VS2QDs), namely, L‐cysteine capped VS2QDs (L‐cys‐VS2QDs), thioglycolic acid capped VS2QDs (TGA‐VS2QDs), and 3‐mercaptopropionic acid capped VS2QDs (MPA‐VS2QDs) are synthesized via hydrothermal method. The comparison of the biocompatibility (MTT assay) of three differently capped VS2QDs is performed in RAW cell 264.7 cells with different concentrations (500, 250, 125, 62.5, 15.625, 7.812, and 3.906 μg mL−1). It is found that L‐cys‐VS2QDs show more biocompatibility than the TGA‐VS2QDs and MPA‐VS2QDs. However, at low concentrations, TGA‐VS2QDs also show better biocompatibility, whereas MPA‐VS2QDs show the least biocompatibility. Biocompatibility of L‐cys‐VS2QDs is also almost consistent with entire range of QDs concentrations may be due to L‐cys cellular inflammation and maintaining pH buffer.