With their bright, photostable fluorescence, semiconductor quantum dots show promise as alternatives to organic dyes for biological labeling. Questions about their potential cytotoxicity, however, remain unanswered. While cytotoxicity of bulk cadmium selenide (CdSe) is well documented, a number of groups have suggested that CdSe QDs are cytocompatible, at least with some immortalized cell lines. Using primary hepatocytes as a liver model, we found that CdSe-core QDs were indeed acutely toxic under certain conditions. Specifically, we found that the cytotoxicity of QDs was modulated by processing parameters during synthesis, exposure to ultraviolet light, and surface coatings. Our data further suggests that cytotoxicity correlates with the liberation of free Cd2+ ions due to deterioration of the CdSe lattice. When appropriately coated, CdSe-core QDs can be rendered non-toxic and used to track cell migration and reorganization in vitro. Our results inform design criteria for the use of QDs in vitro and especially in vivo where deterioration over time may occur.