In this study, the preparation of the novel imaging agents, folate receptor (FR)-targeted liposomes encapsulating hydrophilic CdTe quantum dots (QDs), and their use as luminescence probes for live cell imaging are reported. Hydrophilic CdTe QDs were directly synthesized in the water phase, and FR-targeted QD liposomes were prepared by hydrating the lipid thin film with CdTe suspension. Formulations were characterized by UV-visible and fluorescent measurements, liposomal particle size, and zeta potential. The targeting and imaging ability of FR-targeted liposomes were investigated against the human uterine cervix cancer cell line (HeLa). Furthermore, the cytotoxicity of QD liposomes was evaluated by HeLa cells incubated with FR-targeted QD liposomes, nontargeted QD liposomes, and free QDs. The results showed that FR-targeted QD liposomes were spherically shaped with high fluorescence yield, excellent photochemical stability, good cancer targeting, and minimal cytotoxicity. The average size of FR-targeted fluorescence liposomes was ~105 nm, and their size distribution was rather narrow. After storage at 4 degrees C for 11 months, QD liposomes maintained similar size and did not show any leakage of QDs. FR-targeted CdTe QD liposomes, which can target tumor cells via FR-mediated endocytosis, would become an attractive probe for tumor cell or tissue imaging for a long-time monitoring.