The use of quantum dots for biological and biomedical applications is one of the fastest moving fields of nanotechnology today. The unique optical properties of these nanometer-sized semiconductor crystals make them an exciting fluorescent tool for in-vivo and in-vitro imaging as well as for sensoric applications. To apply them in biological fluids or aqueous environment it is essential to modulate the chemical nature of quantum dot surfaces to alter their solubility and add additional chemical functionalities. By employing different coating technologies they cannot only be rendered water soluble but also functionalized to fulfill different tasks, like receptor targeting or sensing of low molecular weight substances. To achieve this goal different polymeric coatings are applied to provide solubility in water and additional functional groups for attachment. Taken together the versatile modifications described in this review make quantum dots a promising alternative to conventional fluorescent dyes and may offer possibilities for new future developments.