In recent decades, Cd-based quantum dots (QDs) have gained tremendous interest as luminescence tags for numerous biological applications. However, chemical synthesis using organic molecules to encapsulate the QDs surface is a highly complex process, high-cost and aggressive fabrication, and less aqueous and biocompatible, which leads to restricted biological applications. In this paper, we have reported the biogenic synthesis of CdSe-HSA core and CdSe@ZnSe-HSA core−shell QDs for the first time using human serum albumin protein as a surface engineering molecule. The biosynthesized QDs were found to be smaller in size (2−3.5 nm) and highly aqueous compatible (stable for up to 150 days). The biosynthesized QDs act as ultrasensitive fluorescence probes for label-free sensing of Hg 2+ with enhanced efficiency, and an LOD value of 1.3 nM for CdSe@ZnSe-HSA QDs (concentration range: 0−2 μM) was obtained and were also able to detect with the naked eye. A dynamic quenching mechanism was observed for the fluorescence quenching of the biosynthesized QDs by Hg 2+ ions, and affinity toward the formation of Hg−Se or Hg−SH with the QDs provided the unique selectivity. Moreover, the smaller size and unique surface properties of the biosynthesized QDs contributed to the enhanced antibacterial properties against Gram-positive (S. aureus) and Gram-negative (E. coli) bacteria and found more effective against Gram-negative bacteria. This work implies the biogenic aqueous compatible synthesis of core and core−shell QDs for biological and environmental monitoring analytical methods for the development of bionanotechnology.