Metal chalcogenide nanomaterials have gained widespread interest in the past two decades for their potential optoelectronic, energy, and catalytic applications. The colloidal growth of various forms of these materials, such as nanowires, platelets, and lamellar assemblies, proceeds through certain thermodynamically stable, ultrasmall (<2 nm) intermediates called magic‐sized nanoclusters (MSCs). Due to quantum confinement and its resultant intriguing properties, isolation or direct synthesis of MSCs and their structure characterization, which is very much challenging, are current topics of fundamental and applied scientific research. By comprehensive understanding of the structure–activity relationships in MSCs, the nucleation and growth processes can be manipulated, resulting in the synthesis of novel metal chalcogenide materials for various applications. This review focuses on recent advances in the chemical synthesis, characterization, and theoretical calculations of CdSe and its related II–VI nanoclusters. It highlights the studies of photophysical and magneto‐optical properties as well as heteroatom doping of MSCs followed by their chemical transformation to high‐dimensional nanostructures. At the end of the review, future directions and possible ways to overcome the challenges in the research of semiconductor MSCs are also presented.