Herein, we report a facile microwave-assisted synthesis of cadmium-free water-soluble silver indium sulfide (AgInS2 or AIS) and AgInS@ZnS (or AIS@ZnS) core-shell quantum dots (QDs) using glutathione (GSH) as stabilizer. The core and core-shell nanocrystals exhibit tunable bandgap ranging of 2.3–3.1 and 2.4–3.5 eV, mean particle size of 2.5 and 3.25 nm, quantum yield of 26% and 49%, and fluorescence lifetimes of 326 and 438 ns, respectively. The core-shell QDs exhibit color-tunable emission in the visible region (500 to 600 nm), where the tunability was achieved by varying the molar ratio of Ag:In in the precursors. In vitro evaluation of antifungal activity of these water/ buffer stable QDs against the fungal pathogen, Candida albicans demonstrated that these were not toxic to the fungal cells upto a concentration of 100 µg/ml for 16 hours of incubation. Confocal imaging and spectrofluorometric studies showed enhanced fluorescence inside the microbial cells suggesting that AIS@ZnS particles had the capability to easily penetrate the cells. The increased generation of reactive oxygen species was evaluated for the core-shell QDs (photosensitizers) by using 9, 10-anthracenediyl-bis(methylene)dimalonic acid (ABMDMA) as singlet oxygen (1O2) scavenger molecule. These QDs have the potential for use as high contrast cell imaging, photodynamic and antifungal agents.