We report the effect of the initial Ag : In stoichiometry, capping ligand concentration, and reaction temperature on the optical properties (such as photoluminescence [PL] quantum yield, PL full width at half-maximum, and wavelength of maximum PL emission) of AgInS2 quantum dots (QDs). The fabricated QDs exhibit excellent optical characteristics, including PL quantum yields of up to 22% and the appearance of an excitonic absorption peak. This is the first reported observation of such a well-defined exciton absorption feature in AgInS2 QDs. Its appearance could indicate a relatively narrow size distribution or minimization of nonradiative recombination at the surface sites of the QDs. Moreover, we report one-pot two-step synthesis of highly luminescent AgInS2-ZnS QDs by injection of ZnS precursors directly into the same reactor with existing AgInS2 cores without any purification. In addition, to demonstrate their potential biomedical application, the AgInS2-ZnS QDs were coated with poly(maleic anhydride-alt-1-octadecene) and further conjugated with folic acid for human liver carcinoma (HepG2) tumor cell labeling. The folate-receptor-mediated cellular uptake of the folic-acid-conjugated AgInS2-ZnS QDs was confirmed by confocal imaging characterization. Additionally, the small dimensions and high solubility of the folic-acid-conjugated AgInS2-ZnS QDs were also exploited in prefixed-cell staining; the QDs entered the complex cellular matrix and stained both the nucleoli and cytoplasm of HepG2 cells.