Water-soluble and non-aggregating gold nanoclusters (AuNCs) were obtained by modification of the AuNCs with dithiothreitol (DTT) and then coating them with carboxylated chitosan. This process remarkably enhances the dispersibility of DTT-coated AuNCs in water. The resulting AuNCs, on photoexcitation at 285 nm, display strong red emission with a maximum at 650 nm and a 23% quantum yield. Fluorescence is strongly and selectively suppressed in the presence of 6-mercaptopurine (6-MP). Photoluminescence drops linearly in the 0.1-100 μM 6-MP concentration range, and the detection limit of this assay is 0.1 μM. Other features of the modified AuNCs include a decay time of 8.56 μs, a 365 nm Stokes shift, good colloidal stability, ease of chemical modification, and low toxicity. Conceivably, these NCs may find a range of applications in biological imaging and optical sensing. Graphical abstract Highly fluorescent and water-soluble gold nanoclusters (AuNCs) were obtained by modification of the AuNCs with dithiothreitol (DTT) and then coating them with carboxylated chitosan (CC). The resulting CC/DTT-AuNCs were used for sensitive and selective detection of 6-mercaptopurine.