Mn2+-doped ZnSe quantum dots (Mn:ZnSe d-dots) with a tunable photoluminescence (PL) peak position were made to be water soluble by coating them with a monolayer of mercaptopropionic acid, a very short hydrophilic thiol. If the dopant centers were located close to the surface, thiol-coating partially quenched the PL. With about 2-3 monolayers of pure ZnSe on the surface, the PL of d-dots was actually enhanced upon thiol coating. When the doping centers were placed reasonably inside a d-dot, with about four monolayers of pure ZnSe between the doping centers and the surface ligands, the thiol ligands did not quench the PL of the d-dots, even though they did completely quench the PL of intrinsic ZnSe quantum dots. The overall size of such d-dots/ligand complex is only about 7-8 nm, implying an excellent permeability in biological issues. These d-dots were found to be exceptionally stable against continuous UV radiation in air for at least 25 days. They were also stable in boiling water with air bubbling under room light for hours. Recognition of a biotin pattern by d-dots conjugated with avidine was carried to illustrate the suitability of these efficient (about 40% PL quantum yield), stable, small, and water-soluble d-dots as biomedical labeling reagents.