This paper presents the synthesis of aqueous cadmium sulfide (CdS) quantum dots (QDs) and silica-encapsulated CdS QDs by reverse microemulsion method and utilized as targeted bio-optical probes. We report the role of CdS as an efficient cell tag with fluorescence on par with previously documented cadmium telluride and cadmium selenide QDs, which have been considered to impart high levels of toxicity. In this study, the toxicity of bare QDs was efficiently quenched by encapsulating them in a biocompatible coat of silica. The toxicity profile and uptake of bare CdS QDs and silica-coated QDs, along with the CD31-labeled, silica-coated CdS QDs on human umbilical vein endothelial cells and glioma cells, were investigated. The effect of size, along with the time-dependent cellular uptake of the nanomaterials, has also been emphasized. Enhanced, high-specificity imaging toward endothelial cell lines in comparison with glioma cells was achieved with CD31 antibody-conjugated nanoparticles. The silica-coated nanomaterials exhibited excellent biocompatibility and greater photostability inside live cells, in addition to possessing an extended shelf life. In vivo biocompatibility and localization study of silica-coated CdS QDs in medaka fish embryos, following direct nanoparticle exposure for 24 hours, authenticated the nanomaterials' high potential for in vivo imaging, augmented with superior biocompatibility. As expected, CdS QD-treated embryos showed 100% mortality, whereas the silica-coated QD-treated embryos stayed viable and healthy throughout and after the experiments, devoid of any deformities. We provide highly cogent and convincing evidence for such silica-coated QDs as a model nanoparticle in practice, to achieve in vitro and in vivo precision targeted imaging.